Secured $200 million recovery and governance reforms in derivative action over unsecured loan between Clear Channel entities
Plaintiff(s):
Institutional investors and shareholders of Clear Channel Outdoor Holdings, Inc. (“Outdoor”)
Case type / claims:
Derivative action alleging breaches of fiduciary duty by Outdoor’s Board for permitting its controlling shareholder, Clear Channel Communications, Inc., to borrow nearly all of Outdoor’s cash—over $700 million—on an unsecured basis at below-market interest rates.
Defendant(s):
Clear Channel Outdoor Holdings, Inc. Board of Directors and controlling shareholder Clear Channel Communications, Inc.
Jurisdiction:
Delaware Chancery Court
Year:
2013
Outcome:
- Negotiated settlement returning $200 million to Outdoor shareholders through immediate debt reduction and a special dividend.
- Secured structural governance reforms to protect minority shareholders, including enhanced oversight, recall rights, and reporting obligations for intercompany loans.
- Case highlighted fiduciary duties in transactions involving controlling shareholders and affiliated entities.
