WILMINGTON, Del. — Liberty Media chief executive Gregory Maffei told a judge he had a volatile relationship with IAC/InterActive Corp chairman Barry Diller and wasn’t happy with his management of the company.
Maffei testified on the second day of a trial to settle a dispute over the control of New York-based IAC. Liberty chairman John Malone, whose Douglas County-based company owns a 30 percent stake in IAC, has traded lawsuits with Diller over a plan to split the company and halve Liberty’s voting power.
“I was not happy with IAC’s performance. I thought it was lagging,” Maffei said Tuesday in Delaware Chancery Court. “The company’s performance was lagging, so we were less happy with Mr. Diller’s stewardship of the company.”
Diller, 66, is dueling with Malone over control of the company he built with Malone’s help in 1995. Diller’s spinoff proposal would split IAC into five companies with a new, single-vote-per-share structure.
Malone, 67, wants a two-tier structure to maintain his control. The dispute centers on a proxy agreement that gives Diller control of the voting rights of Liberty’s IAC shares, or 62 percent of the voting power.
Malone testified Monday that the relationship between the two companies soured after Liberty hired Maffei, 47, as president and chief executive in early 2006.
Malone said he knew Maffei had clashed with Diller during IAC’s 2001 bid to buy Microsoft Corp.’s majority interest in online travel agency Expedia Inc., where Maffei was chairman. Malone described a conversation with Diller in which the IAC chief called Maffei “a poor choice.”
Chancery Judge Stephen Lamb is hearing the case.
Maffei testified that shortly after he arrived at Liberty he began looking for ways to circumvent the agreement and gain control of IAC or part ways with the company.
One of the objectives was to convert Liberty’s minority investments into larger operating stakes. In general, minority roles in “other people’s businesses” weren’t attractive, he said.
