Spanish Broadcasting denounces Lehman Brothers complaint as frivolous

Spanish Broadcasting System (SBSA) announced that on February 14, Lehman Brothers Holdings (LEHMQ), purporting to own approximately 39% of the outstanding SBS Series B Preferred Stock, filed a complaint against the company in the Delaware Court of Chancery alleging a violation of the Preferred Stock Certificate of Designations. More specifically, the Complaint alleges that SBS has failed in its obligations regarding its required preferred stock dividend payments. The company denies the allegations contained in the Lehman complaint and, to the contrary, asserts that it has been and continues to be in full and complete compliance with all of its obligations under the Certificate of Designations for the Series B Preferred Stock, as fully disclosed in the company's filings with the SEC dating back to 2009. Accordingly, the company believes that the Complaint's allegations are frivolous and wholly without merit and intends to contest such allegations vigorously. The company has retained Skadden, Arps, Slate, Meagher and Flom to represent it in connection with the Lehman action. In addition, the company notes that the day before the filing of the Complaint, the judge presiding over the Lehman bankruptcy proceedings denied Lehman's objection to the company's Proof of Claim in an unrelated litigation in which the company is asserting almost $50M in damages as part of a Proof of Claim filed in 2009 relating to a Lehman affiliate's willful failure, prior to its bankruptcy filing, to fund its commitment under the company's then extant revolving credit facility. A trial date has not yet been set for this matter.