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SFX Entertainment Inc. is ready to rock and roll on a settlement of nearly a dozen lawsuits filed in Delaware Chancery Court by shareholders who contend they figuratively got pushed to the back of the auditorium in a $4 billion buyout of the concert promoter by Clear Channel Communications Inc. San Antonio, Texas-based Clear Channel — one the U.S.’s largest radio-station chains — offered in February to swap 0.6 share of its stock for each of New York-based SFX’s Class A shares and one full share for each of SFX’s Class B share. After negotiations with shareholders and their lawyers, SFX agreed to give investors in the Class A shares an extra $34.5 million in cash or stock for their stakes in the company, according to court papers. Under the agreement, shareholders’ lawyers get 15 percent of the payment, or more than $5 million. The deal still must win a judge’s final approval at a hearing Aug. 29. Eleven SFX Class A shareholders filed suit in Chancery Court after the merger was first announced, contending SFX Chairman Robert Sillerman and other executives who own the Class B shares, were getting a sweetheart deal in the buyout. Investors agreed to drop their suit “because, in their view, the settlement achieves objectives to maximize shareholder value [and] obtain additional consideration,” their lawyers said in court papers. Shareholders are represented in the case by Joseph A. Rosenthal of Wilmington’s Rosenthal Monhait Gross & Goddess along with Arthur N. Abbey and James S. Notis of New York’s Abbey Gardy & Squittieri. Other investors are represented by Robert I. Harwood and Samuel K. Rosen of New York’s Weschsler Harwood Halebian & Feffer and Richard S. Schiffrin and Marc A. Topaz of Bala Cynwyd, Pa.-based Schiffrin & Barroway. Other shareholders are represented in the case by Stuart M. Grant of Wilmington’s Grant & Eisenhofer. SFX and its directors are represented by Gregory P. Williams of Wilmington’s Richards Layton & Finger. Clear Channel is represented by Martin P. Tully of Wilmington’s Morris Nichols Arsht & Tunnell along with Edward S. Koppman and Lisa S. Gallerano of Dallas’ Akin Gump Strauss Hauer & Feld. The case is Franklin Advisors Inc., et. al. v. Robert F.X. Sillerman, et. al., CA No. 17878. In an unrelated merger lawsuit, SFX agreed to settle litigation filed in Chancery Court by shareholders of Marquee Group Inc. who contend they didn’t get enough for their stock in SFX’s acquisition of the sports-marketing company. SFX moved in May 1998 to acquire Marquee, which represents professional athletes and produces and markets televised sporting events, in a stock-for-stock transaction valued at about $100 million. Some Marquee shareholders sued in Chancery Court, contending the stock transaction unfairly favored Marquee’s board of directors, which included SFX Chairman Sillerman. Under the original bid, SFX offered to swap shares valuing Marquee’s common stock at $6 per share while offering Marquee’s managers shares worth as much as $7 for their holdings. After negotiations with shareholders’ lawyers and several fluctuations in the companies’ stock prices, SFX ultimately agreed to swap shares valuing all Marquee stock at $4.89 per share to settle the lawsuits, according to court papers. Investors agreed to drop their claims because the settlement “achieves [their] principal objective in the litigation, which was to maximize shareholder value,” shareholders’ lawyers said in court papers. The settlement also called on SFX to cut the fee it would have been entitled to had the merger fallen apart and to pay $385,000 to cover shareholders’ legal fees, court papers say. The settlement still must be approved by a vice chancellor at a hearing Aug. 27 in Wilmington. Marquee shareholders are represented in the case by Monhait of Rosenthal Monhait and Stephen J. Fearon Jr. of New York’s Abbey Gardy & Squitieri. SFX Entertainment and Marquee are represented by Gregory P. Williams of Richards Layton and Vincent Sama of the New York office of Chicago’s Winston & Strawn. The case is Herbert Behrens v. Robert F.X. Sillerman, et. al., CA No. 16355.

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