NBC Takes Dispute With Paxson to Delaware Court

Aug 20, 2004  •  Post A Comment

NBC on Friday asked a Delaware court to decide whether Paxson Communications redeem NBC’s 32 percent stake in the beleaguered broadcaster, intensifying a months-long tussle between the two companies over a payment NBC claims it is entitled to.

Filed in the Court of Chancery of Delaware, NBC is seeking a declaratory ruling on the terms of investment in Paxson, which NBC last year exercised its right to redeem.

NBC claims that by its exercising that right, Paxson is required to pay the network around $581 million to redeem the stake by Nov 13.

Paxson, for its part, said it’s not required to pay NBC because it doesn’t have the cash and its debt covenants prohibit Paxson from making such a payment. Instead, Paxson said, NBC has the right to transfer the stake to a third party if it wants to dump the investment.

“The terms at the heart of this dispute are clear and unambiguous and contradict the claim that NBC has filed,” said Paxson Chairman Lowell “Bud” Paxson.