Ruling backs Diller

A Delaware judge ruled Friday in favor of IAC/InterActiveCorp Chief Executive Barry Diller in a dispute with Liberty Media Corp. that could help determine the fate of the company.

The opinion from the judge said Liberty failed to prove Diller violated an agreement between them by pursuing a plan to break up IAC’s Internet conglomerate into five parts.

New York-based IAC owns such brands as Ask.com, Match.com, Evite and Citysearch.

Diller announced plans in November to spin off its HSN shopping channel, Ticketmaster, LendingTree.com and Interval time-share businesses.

Liberty Media owns about 30% of IAC but controls 62% of the voting power because of a dual-share structure under which it holds all outstanding Class B common stock, which carries 10 votes per share.

Diller has controlled Liberty’s votes under an agreement between the two. Liberty sued to reclaim those voting rights; it said Diller gave them up when he went against Liberty’s wishes in pushing the breakup.

During the trial, Liberty lawyer Kevin Abrams suggested that Diller was trying to rid himself of Liberty’s influence and strengthen his control of IAC.

Liberty attorneys accused Diller of threatening a single-tier voting structure in the spinoffs to force Liberty to swap its IAC shares for certain assets, which could include one of the spun-off companies. In that case, Diller could convert his single-vote shares into Liberty’s more powerful shares, leaving him with a majority interest.

Diller said after testifying in the case that he had enjoyed being on the witness stand.

“I wish this hadn’t happened, but it did,” Diller said Friday through a spokeswoman. “Now it’s over and we can all get on with our work and lives.”

IAC shares rose $1.71 to $22.20 in after-hours trading. The shares had fallen 27 cents to $20.49 in regular trading. Liberty Media shares fell to $22.65 after rising 35 cents to $22.90 in regular trading.