ASCENT CAPITAL GROUP,INC. (NASDAQ:ASCMA) Files An 8-K Other EventsItem 8.01. Other Events.
As previously reported, on August 27, 2018, holders purporting to own approximately 68% of Ascent Capital Group Inc.’s (“Ascent” or the “Company”) 4.00% Convertible Senior Notes due 2020 (the “Notes”) filed a complaint in the Court of Chancery in the State of Delaware (the “Complaint”) against Ascent and each of its directors and executive officers.
On September 5, 2018, holders purporting to own approximately 69% (the “Plaintiffs”) of the Notes filed an amended complaint in the Court of Chancery of the State of Delaware (the “Amended Complaint”) against Ascent and each of its directors and executive officers. The Amended Complaint alleges that Ascent’s participation in the exchange offer (the “Exchange Offer”) related to the 9.125% Senior Notes due 2020 (the “Moni Senior Notes”) of Monitronics International, Inc. (“Moni”) announced by Ascent and Moni on August 30, 2018 would be detrimental to Ascent and, if consummated, would result in Ascent becoming insolvent. The Amended Complaint further alleges that the Exchange Offer would (i) result in a breach of Ascent’s directors’ fiduciary duties to the Company and (ii) constitute a constructive or intentional fraudulent transfer by using assets of Ascent necessary for the repayment of the Notes to purchase outstanding Moni Senior Notes (i.e., a fraudulent transfer). The Amended Complaint seeks (i) injunctive relief to prevent Ascent from engaging in the Exchange Offer, which would allegedly dissipate Ascent’s assets, and (ii) a declaratory judgment that approval of the Exchange Offer constitutes a breach of fiduciary duty by Ascent’s directors and that consummation of the Exchange Offer would constitute a fraudulent transfer by Ascent.
Also on September 5, 2018, the Plaintiffs filed a motion for a preliminary injunction seeking to prevent Ascent from consummating the Exchange Offer. The Plaintiffs also moved for expedited consideration of their motion for a preliminary injunction.
Ascent believes that the claims in the Amended Complaint are meritless, and intends to vigorously defend against this action.
About ASCENT CAPITAL GROUP,INC. (NASDAQ:ASCMA)
Ascent Capital Group, Inc. is a holding company. The Company’s segments include Monitronics, LiveWatch and Other Activities. The Company’s subsidiaries include Monitronics International, Inc. (Monitronics) and LiveWatch Security, LLC (LiveWatch). Monitronics provides a range of residential security services, including hands-free two-way interactive voice communication with the monitoring center, cellular options, and an interactive service option, which allows the customer to control their security system remotely using a computer or smart phone. Monitronics performs monitoring services for subscribers located in all 50 states, the District of Columbia, Puerto Rico and Canada. LiveWatch is a do-it-yourself (DIY) home security provider offering professionally monitored security services through a direct-to-consumer sales channel. LiveWatch offers a differentiated go-to-market strategy through direct response television, Internet and radio advertising.
