Court Appointed Co-Lead Counsel, Rigrodsky & Long, P.A., Obtains Additional Consideration for Mediacom Communications Corporation Shareholders

Court Appointed Co-Lead Counsel, Rigrodsky & Long, P.A., Obtains Additional Consideration for Mediacom Communications Corporation Shareholders

On June 6, 2011, Vice Chancellor Leo E. Strine, Jr. of the Delaware Court of Chancery approved the class action settlement of In re Mediacom Communications Corporation Shareholders Litigation, Consol. C.A. No. 5537-VCS as being fair, reasonable and adequate to the minority, public shareholders of Mediacom Communications Corporation (“Mediacom” or the “Company”).

This lawsuit was brought as a class action against Mediacom and its directors (the “Board”), including Rocco B. Commisso (“Commisso”), the Company’s majority, controlling shareholder, Chairman and Chief Operating Officer.  The litigation was commenced following the May 31, 2010, announcement that Commisso had proposed to acquire all of Mediacom’s Class A and Class B common stock he did not own for $6.00 cash per share (the “Transaction”).  Commisso did not indicate that he was conditioning the Transaction on approval by a majority of the Company’s minority public shareholders (the “Minority Approval Condition”).

At the time of his proposal, Commisso owned approximately 40% of Mediacom’s outstanding common stock and held 87% of its voting power by virtue of his ownership of the Company’s Class B common stock.  The lawsuit alleged, among other things, that Commisso’s offer was unfair, particularly because the special committee formed to consider the Transaction (the “Special Committee”) was believed to be independent and thus could not provide the protections to the minority shareholders that is required under Delaware law.

In its capacity as Court appointed Co-Lead Counsel, Rigrodsky & Long, P.A. engaged in negotiations with counsel for Commisso concerning the claims in the lawsuit and provided their views regarding a fair price for Commisso’s offer.  Subsequently, and following concurrent negotiations with the Special Committee, Commisso agreed to increase the consideration payable to Mediacom shareholders from $6.00 per share to $8.75 per share, representing an aggregate price increase from his initial offer of in excess of $112 million.  In addition, Commisso agreed to adopt a Majority Approval Condition in the Transaction.

Despite the increased consideration, the plaintiffs and their counsel refused to settle the lawsuit, holding firm in their belief that $8.75 did not represent full value for Mediacom shares.

After the Special Committee agreed to the deal at $8.75 and entered into an Agreement and Plan of Merger with Commisso, the focus of the lawsuit turned towards challenging the $8.75 offer price.  Utilizing the pressure of the litigation on defendants, Rigrodsky & Long, P.A., along with its co-counsel, successfully negotiated Commisso’s agreement to pay Mediacom’s minority public shareholders an additional $0.25 per share, for an aggregate additional cash benefit in excess of $10 million and a total deal price of $9.00 per share.  In addition, the Company agreed to disclose additional information to Mediacom shareholders in advance of the shareholder vote on the Transaction.

In approving the settlement, Vice Chancellor Strine lauded the efforts of Rigrodsky & Long, P.A. and its co-counsel, stating:  “It is a rare situation when litigation of this type actually results in a financial benefit that is greater than was achieved by the special committee.”  Accordingly, the Court approved the settlement for obtaining additional consideration for shareholders that was obtained over and above the “aggressive efforts” of the Special Committee.

Rigrodsky & Long, P.A., with offices in Wilmington, Delaware and Garden City, New York, regularly litigates securities class, derivative and direct actions, shareholder rights litigation and corporate governance litigation, including claims for breach of fiduciary duty and proxy violations in the Delaware Court of Chancery and in state and federal courts throughout the United States.