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” or the “Company”), on May 27, 2021, the first of three complaints was filed in the Court of Chancery of the State of Delaware by purported stockholders of MSG Entertainment arising out of the merger between MSG Entertainment and MSG Networks Inc. (“MSG Networks”). After the three cases were consolidated under the caption In re Madison Square Garden Entertainment Corp. Stockholders Litigation, Consolidated C.A. No. 2021-0468-KSJM (the “Litigation”), a consolidated amended complaint was filed on October 11, 2021 against MSG Entertainment, the MSG Entertainment board of directors, and certain Dolan family stockholders. The complaint, which names the Company as only a nominal defendant, asserts putative derivative claims on behalf of the Company alleging that the members of the board of directors and controlling stockholders of the Company violated their fiduciary duties in the course of negotiating and approving the Agreement and Plan of Merger between MSG Entertainment and MSG Networks and Broadway Sub Inc., a wholly owned subsidiary of MSG Entertainment. Plaintiffs seek, among other relief, an award of damages to the Company including interest, and plaintiffs’ attorneys’ fees.
On March 14, 2023, the parties to the Litigation reached an agreement in principle to settle the Litigation 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 Litigation in exchange for a settlement payment to MSG Entertainment of $85 million, subject to customary reduction for attorneys’ fees and expenses, in an amount to be determined by the Court. The settlement amount will be fully funded by defendants’ insurers. The settlement of the Litigation is subject to the final approval of the Court of Chancery of the State of Delaware.
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: March 15, 2023 | By: | /s/ Jamal Haughton | ||||||
| Name: | Jamal Haughton | |||||||
| Title: | Executive Vice President and General Counsel | |||||||