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Commitments and Contingencies
6 Months Ended
Jun. 30, 2011
Commitments and Contingencies [Abstract]  
COMMITMENTS AND CONTINGENCIES
10. COMMITMENTS AND CONTINGENCIES
Legal Proceedings
Jim Knight v. Mediacom Communications Corp.
A purported class action in the United States District Court for the Southern District of New York entitled Jim Knight v. Mediacom Communications Corp., in which MCC is named as the defendant, was filed on March 4, 2010. The complaint asserts that the potential class is comprised of all persons who purchased premium cable services from MCC and rented a cable box distributed by MCC. The plaintiff alleges that MCC improperly “ties” the rental of cable boxes to the provision of premium cable services in violation of Section 1 of the Sherman Antitrust Act. The plaintiff also alleges a claim for unjust enrichment and seeks injunctive relief and unspecified damages. MCC was served with the complaint on April 16, 2010. On August 8, 2011 Mr. Knight dismissed his claim with prejudice and the case was closed.
Mediacom Communications Shareholders Litigation
Between June 3, 2010 and June 10, 2010, three purported class actions lawsuits were filed against MCC and its individual directors, including Mr. Commisso, all in the Court of Chancery of the State of Delaware (which we refer to as the “Delaware Court”), under the captions Colleen Witmer v. Mediacom Communications Corporation, et al., J. Malcolm Gray v. Mediacom Communications Corporation, et al. and Haverhill Retirement System v. Mediacom Communications Corporation, et al. The lawsuits were subsequently consolidated for all purposes in the Delaware Court of Chancery under the caption In Re Mediacom Communications Corporation Shareholders Litigation. On January 4, 2011, a Second Verified Consolidated Amended Class Action Complaint was filed that alleged, among other things, that the defendant directors breached their fiduciary duties to the stockholders of MCC in connection with Mr. Commisso’s proposal to take MCC private, including among other things their fiduciary duty of disclosure, and that MCC, Mr. Commisso and JMC Communications LLC aided and abetted such breaches. The plaintiffs sought injunctive relief, rescission of the transaction or rescissory damages, and an accounting of all damages.
On November 18, 2010, another purported class action lawsuit was filed against MCC and its individual directors, including Mr. Commisso, in the Supreme Court of the State of New York, Orange County, under the caption Wendy Kwait v. Mediacom Communications Corporation, et al. The lawsuit alleged, among other things, that the director defendants breached their fiduciary duties to the stockholders of MCC in connection with Mr. Commisso’s proposal to take MCC private and that MCC and Mr. Commisso aided and abetted such breaches. The plaintiffs sought injunctive relief, rescission of the transaction or rescissory damages.
On November 29, 2010, another purported class action lawsuit was filed against MCC and its individual directors, including Mr. Commisso, in the United States District Court for the Southern District of New York, under the caption Thomas Turberg v. Mediacom Communications Corporation, et al. The lawsuit alleged, among other things, that the director defendants breached their fiduciary duties to the stockholders of MCC in connection with Mr. Commisso’s proposal to take MCC private and that MCC and JMC Communications LLC aided and abetted such breaches. The plaintiffs sought injunctive relief and damages.
On December 10, 2010, another purported class action lawsuit was filed against MCC and its individual directors, including Mr. Commisso, in the United States District Court for the Southern District of New York, under the caption Ella Mae Pease v. Rocco Commisso, et al. The lawsuit alleged, among other things, that the director defendants breached their fiduciary duties to the stockholders of MCC in connection with Mr. Commisso’s proposal to take MCC private; that MCC, Mr. Commisso and JMC Communications LLC aided and abetted such breaches; and that the defendants violated Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder. The plaintiffs sought declaratory and injunctive relief, rescission of the transaction or rescissory damages, and an accounting of all damages, profits and special benefits.
The director defendants, MCC, JMC Communications LLC and Mr. Commisso, as defendants in the foregoing actions, reached agreement with the plaintiffs in all of the foregoing actions providing for the settlement of the actions on the terms and subject to the conditions set forth in a settlement agreement (the “Agreement”), which terms included, but were not limited to, a settlement payment made by MCC on behalf of and for the benefit of the parties to the actions in the amount of $0.25 per share for each share of MCC common stock held by the plaintiff class as of March 4, 2011. The settlement payment to the plaintiff class was reduced by any attorneys’ fees and expenses awarded to plaintiffs’ counsel. On June 6, 2011, the Agreement was approved by the Delaware Court. All litigation related to the going private transaction has been dismissed with prejudice. As of July 25, 2011, all of the conditions to the Agreement had been satisfied. A settlement payment of $10.3 million was subsequently made, of which we funded $5.7 million through a capital distribution to MCC, with the remainder funded by Mediacom LLC.
We are also involved in various other legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these other matters will not have a material adverse effect on our consolidated financial position, results of operations, cash flows or business.