- 36 - Consolidation * * * Times Mirror controls the assets of the LLC through the management agreement, which specifically states that Times Mirror has no fiduciary duty to the holder of Acquisition Parent [MB Parent] and may use its discretion as to the use of the assets. Times Mirror may have the LLC buy its own debt instruments or Times Mirror stock, make business acquisitions or any other transaction to the benefit of Times Mirror. The only limitation is that Times Mirror may not upstream LLC assets to itself. Times Mirror owns all of the common stock of Acquisition Parent and the 20% vote it carries. The ownership of the common stock provides Times Mirror with 100% of the residual ownership and value of Acquisition Parent following redemption of the preferred stock, which is virtually assured in at least 20 years due to the redemption rights and certain put and call options. The equity value of the preferred stock is limited to its stated (redemption) value and fixed dividend payments. Times Mirror has the ability to ensure that the Board of Directors of Acquisition Parent may not do anything that may affect the control or viability of the LLC. Certain board actions require the unanimous vote of the Board. These include: • the incurrence of indebtedness or guarantees of indebtedness of Acquisition Parent • the sale, transfer or other disposition, pledge or assignment of any portion or all of its LLC interest • the issuance of any other securities of Acquisition Parent All of these factors indicate that Times Mirror not only controls the assets of the LLC, but also is the beneficiary of all of the ownership risks and rewards of the LLC. * * *Page: Previous 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 Next
Last modified: May 25, 2011