Dolan v. Altice Usa, Inc.

2019 WL 2711280 (2019)

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Nature of the Case

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Facts

Dolan (Ps) are the founders of Cablevision Systems Corp., a publically traded Delaware corporation and one of the largest cable operators in the United States. Cablevision, Altice N.V. and Neptune Merger Sub Corp. entered into an Agreement and Plan of Merger whereby D agreed to pay $34.90 per share of Cablevision stock, resulting in total merger consideration of $17.7 billion. As part of the deal Ps tried to carve out an asset called News12 from the merger but in exchange bargained for a commitment from d, memorialized in the Merger Agreement, that d would operate News12 'substantially in accordance with the existing News12 business plan . . . through at least the end of plan year 2020.' Immediately after the merger D laid off several News12 employees and planned to lay off more, allegedly in violation of the News12 business plan as incorporated in the Merger Agreement. D declined to rescind the layoffs or commit to honor the News12 business plan. Ps along with two News12 employees, initiated this action to obtain specific performance of the Merger Agreement. D moved to dismiss. D claims the News12 business plan was expressly not among the covenants that survived the closing of the Merger. It also argues the Ps are not parties to, or third-party beneficiaries of, the Merger Agreement and, thus, lack standing to seek specific performance of that contract. Ps maintain they are either parties to the Merger Agreement, even though not identified as such, or third-party beneficiaries, even though the Merger Agreement expressly disclaims the existence of third-party beneficiaries. Ps argue that if they are not deemed parties to or third-party beneficiaries of the Merger Agreement, then there will be no one to enforce Section 6.4, a provision included in the Merger Agreement expressly for their benefit.