A judge in California has dismissed the lawsuit filed by satellite radio shareholders calling themselves Save Sirius.
But U.S. District Court Judge Cormac Carney gave Michael Hartleib, a California real estate broker and leader of Save Sirius, 20 days to amend and refile the suit. Hartleib tells Radio World he intends to do so.
One of the main reasons given for the dismissal was seven out of 12 Sirius XM board members are new and had not been given time to respond to the shareholder demands. The judge also held in the decision that the claim of breach of fiduciary duty failed because Hartleib failed to show that he has suffered special losses not suffered by all other shareholders beyond a reduction in the value of his stock.
In a footnote, the judge cautions Hartleib to back up his claims with specifics.
In the suit, shareholders claim Sirius XM management, an in particular, chief executive Mel Karmazin violated the federal Racketeering and Corrupt Organizations Act and breached their fiduciary duty to the shareholders by agreeing to onerous financial conditions in order to close the merger of the two satellite companies, claims that Sirius XM refutes.
The shareholders seek to postpone the planned Dec. 18 to vote increase the number of available shares from 4.5 billion to 8 billion and to postpone the proposed reverse split, ranging from 1 for 10 to 1 for 50.
Should Hartleib re-file, Sirius XM would have an additional 20 days to respond.
