Louisiana Teachers' Retirement System, Baton Rouge, filed suit against Regal Entertainment Group, Knoxville, Tenn., seeking to block a special $710 million dividend that the system contends is largely an extraordinary payout to Regal's majority owner, Philip Anschutz, who also is a director.
Mr. Anschutz would receive $358 million of the special dividend, payable June 2, according to the complaint, filed in Delaware Chancery Court in Wilmington. Mr. Anschutz and the seven other Regal directors were named as defendants in the suit filed by Grant & Eisenhofer, counsel to the $10 billion pension fund.
The suit asserts that the planned dividend, along with another special dividend of $715 million paid last July, which netted Mr. Anschutz $373 million, would leave Regal in a "financially weakened condition," producing a "crushing debt burden" of $2.1 billion, up from $670 million. Mr. Anschutz, who owns 58% of the stock, controls 78% of the votes. "There is no business purpose for the proposed Regal dividend," Jay Eisenhofer, counsel to the Louisiana fund, said in a statement.
The suit also seeks unspecified compensatory damages to Regal and litigation expenses to the Louisiana fund.
Don De Laria and Dick Westerling, investor and media contacts at Regal, respectively, didn't return calls for comment.
