Tribune Media Company has axed its merger agreement with Sinclair Broadcast group and is taking Sinclair to court for breach of contract. Contracts and contract litigation cases such as this in Maryland and elsewhere are usually launched to seek compensation for a party breaching a contract, and in this instance, for breaching a merger agreement. Tribune Media has accused Sinclair of refusing to sell stations in the market as stipulated by the agreement.
In fact, Tribune Media says that everything Sinclair did blatantly violated the merger agreement. The Federal Communications Commission (FCC) found that Sinclair may have left out or misrepresented facts to sidestep ownership rules outlined by the FCC, thus putting the merger on hold indefinitely while a judge decides if Sinclair indeed acted inappropriately. Tribune Media claims that because of the delay caused by Sinclair the merger would not have been able to be completed in a timely manner or not at all.
Tribune Media's chief executive officer (CEO) said despite the outcome of the merger agreement the company has had a promising second quarter. Programming expenses are down significantly, while revenues have increased. The CEO also said the company has nearly $830 million in cash on hand, and Tribune Media is stronger than it ever has been -- a plus for its shareholders.
Contracts and contract litigation is not for the faint of heart. The issues surrounding them can be complex and confusing. Having a Maryland attorney's advice when it comes to contractual agreements can be a bonus to a business owner. Getting a lawyer's take on potential business endeavors may mean the difference between smooth sailing and possible problematic issues.