IAC, Liberty sue each other over spinoff

IAC/InterActiveCorp and its chief executive, Barry Diller, have sued IAC’s controlling shareholder, Liberty Media Corp., in a dispute that threatens the Internet conglomerate’s plans to spin off four units.

In their lawsuit, IAC and Diller asked the Delaware Chancery Court on Wednesday to rule that the spinoff could go forward as unanimously approved by IAC’s board, which includes Liberty Media Chairman John Malone.

In a countersuit Thursday, Liberty accused Diller and IAC’s board of structuring the spinoff to “wrest eventual control of IAC’s businesses away from Liberty” by diluting its voting power to 29.9% from nearly 62%.

Liberty asked the court to halt the spinoff, to find that Diller and the IAC board of directors breached their fiduciary duties and to award Liberty damages.