Liberty Media: BNY Mellon Appeals Ruling On Spin-Offs' Debt

Liberty Media Corp. said Bank of New York Mellon Corp. (BK) is appealing an April court ruling that found the conglomerate's plan to shed a host of businesses wouldn't run afoul of agreements with bondholders.

The split-off of businesses tied to Liberty Capital (LCAPA, LCAPB) and Liberty Starz (LSTZA, LSTZB) is aimed at allowing Liberty Media to focus on its profitable QVC network, along with a group on Internet retail businesses. Liberty Chairman John Malone has said the move is part of an effort to transform the company from a passive holder of stakes in various businesses to an active manager.

The original lawsuit from BNY's corporate trust company, which represents some holders of Liberty Media's roughly $4.7 billion debt, argued the complex transaction would transfer assets that bondholders could claim into the hands of Liberty stockholders. Still, the plan won approval from a corporate law judge in April.

Liberty Media is requesting an expedition of the latest appeal and still hopes to complete the split-off before Sept. 23, the last trading day on which Liberty can complete the deal under its current charter.

Shares of Liberty Interactive (LINTA, LINTB) were recently trading down a penny to $17.56, while shares of Liberty Starz were off 0.6% to $78.11 and Liberty Capital shares gained 1.1% to $86.95.

-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909; [e-mail]