Granite Wins Approval to Sell Stations

Jun 30, 2006  •  Post A Comment

Granite Broadcasting got good news Thursday from a Delaware judge who cleared the way for the cash-strapped station group to complete the sale of two broadcast outlets.

Winning approval to close the $150 million sale of WB affiliates KBWB-TV in San Francisco and WDWB-TV in Detroit to a private investor group let Granite make an interest payment of nearly $20 million Friday and avoid defaulting on $405 million in secured notes.

Harbinger Capital Master Fund, a Granite stockholder, had sued to block the sale to the investor group led by former Meredith and Cox executive Kevin O’Brien. The court rejected Harbinger’s claims that the transaction wasn’t in the best interest of shareholders and would do nothing more than buy Granite time.

Vice Chancellor Stephen Lamb of Delaware’s Court of Chancery dismissed Harbinger’s suit, saying that a stockholder does not have the right to invoke laws meant to protect a creditor from corporations that shed assets improperly.

Granite didn’t have an immediate comment on Friday.