A U.S. District Court has denied a request for a preliminary injunction by a group of Emmis preferred shareholders who claimed, among other things, that Emmis should not have bought back preferred stock without first paying dividends. The company stopped paying dividends on the preferred stock in 2008. Smulyan tells Radio Ink he is very very pleased." An Emmis shareholder meeting is scheduled for next week. It was postponed until a judge made a ruling in this case.
The court said the plaintiffs failed to demonstrate that they'd have a reasonable likelihood of prevailing in court with their contention that Emmis violated the law and its own articles of incorporation, and therefore their request "failed to meet any of the threshold requirements for injunctive relief."
The ruling says, "At this preliminary stage of the litigation, Plaintiffs have failed to show that Defendants’ actions contravened either the [Indiana Business Corporation Law] or the relevant federal securities disclosure laws."
I figured that's how this suit would turn out. Basically the preferred holders seem to be arguing that EMMS wasn't entitled to make a bid to retire their preferred shares at a discount to face value, but every buyback offer stands alone and can be made from any number of sources including the company.