Dolan Versus Altice Lawsuit Trial Date Set September 4

NEW YORK, Aug. 21, 2019 /PRNewswire/ -- The Dolan versus Altice lawsuit is proceeding to trial on September 4.

A Delaware judge cleared the Dolan Family to pursue a lawsuit against Altice USA (NYSE: ATUS) in a bid to protect jobs and in-depth hyperlocal news at News 12 Networks.

Update on the Trial

In an opinion issued on June 27, the Honorable Joseph R. Slights III, Vice Chancellor, Court of Chancery, State of Delaware, ruled the lawsuit may proceed to trial.

Altice had filed a motion on April 22, 2019 to dismiss the case.

Vice Chancellor Slights denied Altice's motion to dismiss the Dolan Family's breach of contract and promissory estoppel claims. Altice sought to prevent the lawsuit from going to trial, scheduled for September 4, by filing the motion to dismiss. Excerpts from the judge's June 27 ruling:

" … the motion to dismiss the Dolan family's breach of contract and related declaratory relief claims is denied." (page 4)

"For purposes of this motion to dismiss, I accept as true the Complaint's well-pled allegations and draw all reasonable inferences in Plaintiffs' favor." (page 5)

"As noted, in exchange for the Dolan family's agreement to include News 12 in the merger, Altice agreed to include a covenant in the Merger Agreement (Section 6.4(f)) that it would operate News 12 in accordance with the station's then-existing business plan." (page 9)

"The Court entered that order on February 13, 2019, prohibiting Altice from terminating any News 12 employee during the pendency of this litigation, except for actual, bona fide cause or upon approval of the Court." (page 15)

Altice Harming News 12

Actions that led to the Dolan's filing the lawsuit on September 4, 2019 included Altice eliminating approximately 70 News 12 positions and planning for further cuts.

Altice's actions have had an adverse effect on News 12. Dozens of seasoned on-air and support staff members were laid off and their positions eliminated. Two of the Network's five studios were shut down. Anchors and producers for the Westchester and Connecticut operations were forced to relocate to other areas, where they have virtually no contact with the communities they cover. Important public service programming was eliminated. In-depth coverage of local issues was reduced.

Additionally, Altice recently crossed a journalistic red line by using on-air employees in paid advertisements. In one example of this, an Altice news executive dressed in a Dunkin' Donuts uniform is seen delivering coffee to a weather anchor, who is performing as an actor in the commercial. This kind of practice violates a belief embraced by most professional newspeople that news content should always be separate from advertising. Instructing an anchor to utter lines approved by a commercial sponsor may bring in extra revenue, but it undermines viewer trust and compromises News 12's reputation for journalistic integrity … a reputation that had been carefully cultivated and protected for decades.

Comments by former News 12 president, Patrick Dolan

Patrick Dolan, who was president of News 12 at the time of its sale to Altice commented, "Altice's management continues to chip away at the quality of the News 12 service. That is demoralizing for employees. It is damaging to News 12's reputation. And it will result in the loss of viewers and advertisers."

Documents

A website ─ www.dolanalticelawsuit.com─ includes a link to the judge's July 27 opinion, prior legal filings and court orders, news releases as well as major media coverage on the lawsuit, Facebook message from Patrick Dolan to News 12 employees, and letter of support from Long Island's Fair Media Council.

Altice is No Stranger to Lawsuits

Records show Altice is a party to 263 lawsuits worldwide for the three-plus years 2016 to 2019 year-to-date.

This lawsuit and request to permanently enjoin Altice USA was filed September 4 in the Court of Chancery, State of Delaware by the Dolan Family against Altice USA (NYSE: ATUS) for failure to abide by promises Altice made in connection with the 2016 Merger Agreement.

The lawsuit targets Altice USA and alleges that the company disregarded specific News 12 related commitments made as part of its merger with Cablevision Systems Corporation (Cablevision). The merger of Altice and Cablevision closed in June 2016 for a cash value of $17.7 billion and agreed upon non-cash consideration pertaining to protecting news gathering, news production, and News 12 employees for approximately five years.

Plaintiffs in the lawsuit include Charles Dolan, founder and former CEO, Cablevision; Helen Dolan; James Dolan, former CEO of Cablevision; and Patrick Dolan, president of News 12 at the time of the sale.

2016 Agreement Conditions

In order to induce the sale in 2016, Altice agreed to operate News 12 substantially in accordance with the 2015 News 12 five-year Business Plan through at least the end of 2020.

The Business Plan provided News 12 would employ full-time equivalent headcount of 462 people throughout this period and spend agreed upon amounts to support news gathering, news production, and the high-quality of journalism that News 12 had been famous for before the merger.

Altice expressly agreed, in adhering to the News 12 Business Plan, to incur cumulative losses of up to $60 million, but which has not occurred; and further agreed in the operation of News 12 over the five-year period to maintain the network's existing employee base. The Dolan family would not have consented to the merger without Altice's agreement to abide by the News 12 five-year Business Plan.

Contrary to its promise, Altice has realized millions of dollars in profits from News 12 by mass layoffs, cutting back on in-depth quality news, and shuttering certain studios.

2016 Merger Agreement

A key provision of the 2016 Merger Agreement was the requirement for Altice to operate News 12 in substantial accordance with News 12's Business Plan through at least the end of 2020 and support News 12 employees who were responsible for making the network unique among local television stations.

Altice agreed to these nonstandard provisions in a transaction of this type, because Altice knew that continuing the legacy of News 12 was an important consideration for Cablevision's stockholders and a necessary inducement to agree to the merger.

This five-year commitment by Altice was of such importance to the merger that Cablevision intentionally disclosed these protections to public shareholders and to the Securities and Exchange Commission.

Altice Breached the Merger Agreement

Turning its back on its prior representations and promises, in 2017 Altice eliminated approximately 70 News 12 positions — in direct violation of News 12's agreed-upon Business Plan incorporated into the Merger Agreement.

Again in 2018 Altice informed Patrick Dolan that Altice was on the verge of terminating many more News 12 employees, including long-term anchors Colleen McVey and Danielle Campbell, threatening to irreparably harm the quality of the local news content that News 12 creates, the livelihoods of targeted News 12's employees, and the legacy that the Cablevision stockholders  protected through explicit Merger Agreement provisions.

Altice is alleged to have remarked that its singular rationale for wanting to terminate the two women anchors – both highly respected 30-year veterans of News 12 – was to have a "fresh look."

Lawsuit Overview

The lawsuit requests ordering Altice to operate News 12 in substantial compliance with the News 12 Business Plan for a cumulative five-year period – as it agreed – and to appoint a third-party monitor to assist the court in evaluating Altice's compliance. 

The plea for specific performance targets Altice USA because Altice ignored the commitments it made to attain its $17.7 billion acquisition of Cablevision.

The primary purposes of the lawsuit are to protect News 12 employees, consistent with the promises made by Altice in the Merger Agreement, and to continue News 12's rich legacy of high-quality hyperlocal journalism.

About News 12

News 12 Networks consists of seven cable-delivered local news television channels serving Long Island, Westchester, the Hudson Valley, southwest Connecticut, the Bronx, Brooklyn and New Jersey. It was founded by the Dolan Family to give back to local communities through high quality, "hyperlocal" tv news coverage.

News 12 provides news coverage 24 hours a day, and focuses on providing award-winning, hyperlocal, in-depth news coverage that is rare in the United States, particularly with respect to the region it serves.

The Dolan Family deliberately and methodically built News 12 as the foremost hyperlocal news source for the edification of Long Island, Bronx, Brooklyn, Westchester, Connecticut, and New Jersey.

Due to the pre-merger journalistic freedom provided by Cablevision's ongoing financial support, the employees of News 12 could rigorously pursue important stories addressing significant local issues relevant to millions of individuals residing in the coverage area.

No news station would have otherwise had the resources to uncover and report these vital stories.

News 12 was and is of singular importance to the Dolan Family, former Cablevision stockholders in general, News 12's employees, and the viewers within News 12's coverage community.

About Altice

Altice USA (NYSE: ATUS) is a Delaware corporation. Altice Europe is a Dutch company. Altice Europe is successor in interest to Altice N.V., and thereby bound to the terms of the 2016 Merger Agreement.

Altice USA is one of the largest broadband communications and video service providers in the United States, delivering broadband, pay television, telephony services, proprietary content and advertising services to approximately 4.9 million residential and business customers across 21 states through its Optimum and Suddenlink brands.

Patrick Drahi is Altice USA's controlling stockholder and Board Chair. Mr. Drahi has been in the news lately in connection with his bid to purchase Sotheby's.

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SOURCE The Dolan Family