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Contingencies | 6 Months Ended
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Sep. 30, 2018
Commitments and Contingencies Disclosure [Abstract] |
Contingencies | Contingencies From time to time, the Company is involved in certain claims and legal proceedings arising in the normal course of business. In addition, the matters discussed below under the captions Fiduciary Litigation and Appraisal have arisen in connection with the Starz merger. The Company establishes an accrued liability for legal claims when the Company determines that a loss is both probable and the amount of the loss can be reasonably estimated. Once established, accruals are adjusted from time to time, as appropriate, in light of additional information. The amount of any loss ultimately incurred in relation to matters for which an accrual has been established may be higher or lower than the amounts accrued for such matters. Due to the inherent difficulty of predicting the outcome of litigation and claims, the Company often cannot predict what the eventual outcome of the pending matters will be, what the timing of the ultimate resolution of these matters will be, or what the eventual loss, if any, related to each pending matter may be. Accordingly, at this time, the Company has determined a loss related to these matters in excess of accrued liabilities is reasonably possible, however a reasonable estimate of the possible loss or range of loss cannot be made at this time. Fiduciary Litigation Between July 19, 2016 and August 30, 2016, seven putative class action complaints were filed by purported Starz stockholders in the Court of Chancery of the State of Delaware (the "Fiduciary Litigation"). These actions have been consolidated into In re Starz Stockholder Litigation, Consolidated C.A. No. 12584-VCG, and the plaintiffs in the consolidated action filed a verified consolidated class action complaint on August 16, 2016. On August 18, 2016, plaintiffs filed a motion for expedited proceedings. On September 22, 2016, the court denied the motion. The defendants filed answers to the verified consolidated class action complaint on January 24, 2017. On May 16, 2018, the plaintiffs filed a verified amended consolidated class action complaint. The amended complaint names as defendants former members of the board of directors of Starz Susan Lyne, Andrew Heller, Greg Maffei, Christopher Albrecht, Daniel E. Sanchez, and Charles Y. Tanabe. The amended complaint also names as defendants Dr. Malone and Lions Gate. The amended complaint alleges, among other things, that the members of the Starz board of directors breached fiduciary duties owed to Starz and the holders of Starz Series A common stock in connection with the merger and related transactions; that Dr. Malone was a controlling stockholder of Starz who breached fiduciary duties owed to other Starz stockholders in connection with the merger and related transactions; and that Lions Gate aided and abetted such breaches of fiduciary duty. On June 18, 2018, the defendants (except Mr. Heller and Ms. Lyne) filed answers to the amended complaint. On July 3, 2018, Mr. Heller and Ms. Lyne filed a motion seeking summary judgment on the claims against them. On August 9, 2016, a putative class action complaint was filed by a purported Starz stockholder in the District Court for the City and County of Denver, Colorado: Gross v. John C. Malone, et al., 2016-CV-32873. The complaint names as defendants the members of the board of directors of Starz, Dr. Malone and Robert Bennett, as well as Lions Gate and an affiliated entity. The complaint alleges, among other things, that the members of the Starz board of directors breached fiduciary duties owed to Starz and the holders of Starz Series A common stock in connection with the merger and the transactions contemplated by the merger agreement, and that Dr. Malone, Mr. Bennett, Lions Gate, and Merger Sub aided and abetted such breaches of fiduciary duty. On December 10, 2016, the court granted the defendants’ unopposed motion to stay the action pending final resolution of the consolidated Delaware action. As disclosed in the Company's Current Report on Form 8-K filed on August 24, 2018, on August 22, 2018, the parties to the Fiduciary Litigation reached an agreement in principle providing for the settlement of the Fiduciary Litigation on the terms and conditions set forth in an executed term sheet. On October 9, 2018, the parties to the Litigation executed a stipulation of settlement, which was filed with the court (the "Stipulation"). The Stipulation provides for, among other things, the final dismissal of the Fiduciary Litigation in exchange for a settlement payment made in the amount of $92.5 million, which the Company has included in accounts payable and accrued liabilities in the unaudited condensed consolidated balance sheet as of September 30, 2018. The Company has also reached agreements with certain insurance carriers for aggregate insurance reimbursement of $37.8 million, which amount the Company has recorded as a receivable included in the "other current assets" line item in the unaudited condensed consolidated balance sheet as of September 30, 2018, and the Company is continuing to seek additional insurance reimbursement, including pursuant to a lawsuit submitted by the Company on November 7, 2018 against certain insurers. Accordingly, the Company has recorded the net expense of $54.8 million in the "shareholder litigation settlements" line item in the unaudited condensed consolidated statement of operations related to these items. The settlement of the Fiduciary Litigation is subject to the final approval of the Court of Chancery of the State of Delaware. In addition, the settlement of the Fiduciary Litigation is not contingent or dependent in any way on, and does not release or resolve claims for, the separate statutory appraisal action brought by petitioners in the Appraisal Litigation, described below. On November 5, 2018, an insurer that entered into an agreement to contribute $10 million to the Company's aggregate insurance reimbursement filed a lawsuit seeking declaratory judgment for reimbursement of its agreed upon payment. The Company believes the lawsuit to be without merit and intends to vigorously defend it. Appraisal Between December 8, 2016 and March 16, 2017, five verified petitions for appraisal (representing approximately 22.5 million shares of Starz Series A common stock) were filed by purported Starz stockholders in the Court of Chancery of the State of Delaware (the "Appraisal Litigation"). These actions have been consolidated into In re Starz Appraisal, Consolidated C.A. No. 12968-VCG. On November 8, 2018, the parties to the Appraisal Litigation entered into a settlement agreement that provides for, among other things, the final dismissal of the Appraisal Litigation in exchange for a settlement payment made by the Company of approximately $961 million. The dissenting shareholders' liability at September 30, 2018 for the Appraisal Litigation, before considering the settlement, would have amounted to $901.9 million, representing the June 30, 2018 accrued liability of $885.2 million (including $87.9 million of previously accrued interest) plus approximately $16.7 million of interest for the quarter ended September 30, 2018. Accordingly, the Company has recorded a shareholder litigation charge of $59.3 million, representing the amount by which the settlement amount exceeds the previously accrued liability, and which is included in the "shareholder litigation settlements" line item in the unaudited condensed consolidated statement of operations for the three and six months ended September 30, 2018. The settlement of the Appraisal Litigation is subject to the final approval of the Court of Chancery of the State of Delaware.

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