Sugarman Group Seeks to Bar Media General Proxy Material

Hollywood producer Burt Sugarman, intensifying his bid to take over Media General, launched a legal attack Wednesday on the proxy statement put out by the management of the newspaper and television concern for its May 20 stockholder meeting.

Sugarman’s investment group asked a federal judge in Richmond, Va., to bar the voting of management’s proxies at the meeting, at which he expects to contest the reelection of three directors. Media General Chairman D. Tennant Bryan and his family control the other six board positions.

The management proxy material was misleading because it failed to disclose that the board has refused to consider his group’s $1.6-billion, or $61.50-a-share, merger offer, the Sugarman motion alleged.

The Sugarman group, which was preparing Wednesday to mail its own proxy material, owns 10.1% of Media General’s Class A shares. The Bryan family’s control of the company largely comes from owning 71% of the company’s pivotal Class B stock, which carries extra shareholder voting power. Bryan and a son also own 11.5% of the Class A stock.

The dual classes of stock arrangement is the target of a court attack filed March 10 by two Class A stockholders. That litigation, and a Sugarman suit against the company, also were not mentioned in the management proxy statement mailed last week, according to the Sugarman group’s court papers.

U.S. District Judge Edward Williams set a hearing on the Sugarman motion for late today in Richmond, according to an officer of the newspaper and television empire, which is based there.

Sugarman also took out a full-page ad in Wednesday’s editions of the Wall Street Journal attacking the dual-class stock setup and the Bryan family’s refusal to consider the group’s merger offer.

“We are not yet requesting your proxy,” the ad said, “but ask only that you withhold judgment until you have read our proxy material, which you will receive shortly.”

Sugarman signed the ad as chairman and chief executive of Barris Industries and Giant Group, public companies he controls and through which he owns the Media General stock.