Spanish Broadcasting System Inc. (SPSA:US), a provider of bilingual radio and TV programs across the U.S., was sued by Lehman Brothers Holdings Inc. (LEHMQ:US), which claims the company owes $29.36 million in preferred stock dividends.
Lehman, based in New York, asked a Delaware Chancery Court (1400L:US) judge to rule the Miami-based broadcaster violated a contract by not making the payments, and is therefore prohibited from incurring additional debt, according to papers made public today in Wilmington.
“Despite the fact” of the contract, and non-payment to Series B preferred stockholders since mid-2009, “the company proceeded in 2011 and 2012 with the incurrence of hundreds of millions of new debt -- including a $275 million refinancing,” Lehman lawyers said in the complaint.
Lehman seeks a ruling that the broadcaster caused a “triggering event” by not paying the dividends, that incurring debt was prohibited. It is also asking for unspecified damages “to be determined at trial,” according to the filing.
A spokesman for Spanish Broadcasting, Brad Edwards, didn’t immediately return calls seeking comment on the lawsuit.
The case is Lehman Brothers Holdings Inc. v. Spanish Broadcasting System, CA8321, Delaware Chancery Court (Wilmington).
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