UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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| Item 8.01 | Other Events. |
As previously disclosed by Madison Square Garden Entertainment Corp. (“MSG Entertainment”), on June 9, 2021, the first of four complaints was filed in the Court of Chancery of the State of Delaware (the “Court of Chancery”) by purported stockholders of MSG Networks Inc. (“MSG Networks”) on behalf of a putative class of MSG Networks stockholders arising out of the merger (the “Merger”) between MSG Entertainment and MSG Networks. After the four cases were consolidated under the caption In re MSG Networks Inc. Stockholder Class Action Litigation, C.A. No. 2021-0575-KSJM (the “MSG Networks Litigation”), a consolidated amended complaint was filed on October 29, 2021 against each member of the board of directors of MSG Networks and certain Dolan family stockholders prior to the Merger. Plaintiffs allege that the MSG Networks board of directors and controlling stockholders breached their fiduciary duties in negotiating and approving the Merger. Plaintiffs seek, among other relief, monetary damages for the putative class and plaintiffs’ attorneys’ fees.
On April 6, 2023, the parties to the MSG Networks Litigation reached an agreement in principle to settle the MSG Networks Litigation, without admitting liability, on the terms and conditions set forth in a binding term sheet (the “Term Sheet”), which will be incorporated into a long-form settlement agreement. The Term Sheet provides for, among other things, the final dismissal of the MSG Networks Litigation in exchange for a settlement payment to the plaintiffs and the class of $48.5 million. MSG Networks has a dispute with its insurers over whether and to what extent there is insurance coverage for the settlement. Unless those parties settle that insurance dispute, it is expected to be resolved in a pending Delaware insurance coverage action. In the interim, and subject to final resolution of the parties’ insurance coverage dispute, certain of MSG Networks’ insurers have agreed to advance $20.5 million to fund the settlement and related class notice costs. The settlement of the MSG Networks Litigation is subject to the final approval of the Court of Chancery.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| MADISON SQUARE GARDEN ENTERTAINMENT CORP. | ||||||
| (Registrant) | ||||||
| Date: April 6, 2023 | By: | /s/ Jamal Haughton | ||||
| Name: Jamal Haughton | ||||||
| Title: Executive Vice President and General Counsel | ||||||