Blockbuster Shareholders Sue Rental Chain
A Reuters newswire article, via eWeek, reports that:
Blockbuster Inc. investors have sued the company and Viacom Inc., saying a dividend supported by Viacom crippled the video rental chain as it tried to compete with an online rival.
The lawsuit, filed on Thursday by Congregation Ezra Sholom in a Texas federal court, says Viacom, as controlling shareholder, caused Blockbuster to go $1.1 billion into debt to pay a $5 per share special dividend in September 2004. The dividend resulted in a cash payment of $738 million to Viacom, which had announced earlier in the year that it wanted to divest its 81.5 percent stake in Blockbuster.
posted by Fergie @ 11/14/2005 09:31:00 PM
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