Dolan vs. Altice Lawsuit Heading for First Hearing

NEW YORK, Jan. 8, 2019 /PRNewswire/ -- On Monday, January 28, the first formal legal hearing will occur to preliminarily address plaintiffs' request to enjoin Altice USA from further cutting employee jobs at News 12.

The hearing will take place in the Court of Chancery, State of Delaware. This first court appearance seeks a temporary restraining order that shields News 12 employees from further cuts and opens the door for discovery. This initial proceeding will lead to a more comprehensive hearing on the preliminary injunction and sets the stage for subsequent court action.

Patrick Dolan Comments

Patrick Dolan, who was president of News 12 at the time of its sale to Altice USA, commented, "I'm disappointed that it came to this, but legal action is necessary to protect News 12's award-winning staff and the quality of the unique hyper-local news programming they deliver to Long Islanders.

"Altice USA management has shown that it's willing to put profits ahead of good people and good journalism. We are asking the court to enjoin Altice USA from further flouting the agreement it made to maintain for at least five years the same level of staffing and programming quality that existed when it acquired News 12 in June 2016."

Patrick Dolan Letter to News 12 Staff December 21, 2018

On Friday, December 21, Patrick Dolan posted on Facebook a letter to his "News 12 family" providing an update on the lawsuit filed in September to protect News 12 and its employees. The full text of the letter is posted at the end of this news release. Highlights quoting Pat Dolan from the letter include: 

"I repeatedly reminded Charlie Stewart, co-president and chief financial officer of Altice USA, and Mike Schreiber, president of Altice USA News, that when Altice bought Cablevision, they promised to maintain staff levels and accept the business plan for five years. We are in court because Altice failed to keep those promises."

"According to the closing documents of the sale, they were not to lay off employees for 5 years, and they were required to run the business according to Cablevision's last five-year plan. When I talked to Charlie about this, his response was that the News 12 part of the agreement is "unenforceable" … meaning Altice never intended to stand by its word."

"I have nothing personally to gain from this lawsuit except a bunch of legal bills. But Altice signed a deal, and now they are breaking their promises. I'm just not good with that. You deserve so much better. I hope you agree that protecting jobs — and preserving News 12's proud tradition of excellence — is worth fighting for."

Background on Lawsuit Filed September 4

A lawsuit and request to permanently enjoin Altice USA was filed September 4 in the Court of Chancery of the State of Delaware by the Dolan Family against Altice USA (NYSE: ATUS) for failure to abide by promises Altice made in a 2016 Merger Agreement and for equitable fraud, among other claims.

The lawsuit targets Altice USA and alleges that the company ignored commitments made as part of its merger with Cablevision Systems Corporation (Cablevision). The merger of Altice and Cablevision closed in June 2016 for a value of $17.7 billion.

Plaintiffs in the lawsuit originally included: Charles Dolan, founder and former CEO, Cablevision; Helen Dolan; James Dolan, former CEO of Cablevision; Patrick Dolan, president of News 12 at the time of the sale; and Colleen McVey, current employee of and news anchor with News 12 Networks. The lawsuit was subsequently amended to include a second long-serving anchor Danielle Campbell.

This lawsuit was filed to protect current employee jobs and programming quality at News 12, which operates a group of local news television channels throughout New York, Connecticut, and New Jersey.

The original lawsuit, as amended to include plaintiffs Colleen McVey and Danielle Campbell, can be found here:  https://www.scribd.com/document/389966322/Dolan-et-al-v-Altice-et-al-Verified-First-Amended-Complaint.

Altice is no stranger to lawsuits. Records show that 126 lawsuits have been filed within the last three years against Altice. 

2016 Agreement Conditions

In order to induce the sale in 2016, Altice USA unambiguously agreed to operate News 12 substantially in accordance with the News 12 Business Plan through at least the end of 2020.

The business plan provided that News 12 would employ full-time equivalent headcount of 462 people throughout this period.

Altice expressly recognized, accepted and agreed, in adhering to the News 12 Business Plan, to incur cumulative losses of up to $60 million, which has not occurred, in the operation of News 12 over the period to maintain the network's existing employee base, as well as the quality and legacy of News 12.

2016 Merger Agreement

A key provision of the 2016 Merger Agreement was the requirement for Altice to operate News 12 in accordance with News 12's Business Plan through at least the end of 2020 and support News 12 employees who were responsible for making the network unique among local television stations.

Altice agreed to these nonstandard provisions in a transaction of this type, because Altice knew that continuing the legacy of News 12 was an important consideration for the Dolan Family and a necessary inducement to agree to the merger.

These covenants were of such importance to the merger, Cablevision intentionally disclosed these protections to public shareholders.

Altice Breached Merger Agreement

Turning its back on its prior representations and promises, in 2017 Altice eliminated approximately 70 News 12 positions — in direct violation of News 12's agreed-upon business plan incorporated into the Merger Agreement.

Altice recently informed the Dolans that Altice is on the verge of terminating dozens more News 12 employees, including Ms. McVey and Ms. Campbell, threatening to irreparably harm the quality of the local news content that News 12 creates, the livelihoods of News 12's employees, and the legacy that the Dolan Family protected through explicit Merger Agreement provisions.

In targeting two women anchors, both dedicated 30-year veterans of News 12 – Altice may be engaging in age and/or gender bias as well as thinning News 12 staff.  

Lawsuit Overview

Plaintiffs' lawsuit requests, in sum, that the Court enter judgment in favor of plaintiffs, enjoining Altice USA from:

• Terminating employment of any current employee of News 12, other than in the ordinary course of business to replace such individual for obvious cause with another person with equivalent qualifications;
  
  
• Taking any action that would cause News 12 to cease to operate in substantial compliance with the News 12 Business Plan; and
  
  
• Taking any action that would, in any way, violate or breach the Merger Agreement.

The lawsuit further requests ordering Altice USA to operate News 12 in substantial compliance with the News 12 Business Plan through at least the year 2020.

The plea for injunctive relief targets Altice USA because Altice ignored the commitments it made to attain its $17.7 billion merger with Cablevision.

The primary purposes of the lawsuit are to protect News 12 employees, consistent with the promises made by Altice in the Merger Agreement, and to continue News 12's rich legacy as one of the topmost local television stations in the U.S.

About News 12

News 12 is a group of cohesive, regional cable news television channels serving nearly 3 million households in New York State, Connecticut, and New Jersey including two boroughs of New York City and most of Long Island.

News 12 provides news coverage 24 hours a day, and focuses on providing award-winning, hyper-local, in-depth news coverage that is rare in the United States, particularly with respect to the region it serves.

The Dolan Family deliberately and methodically built News 12 as the foremost hyper-local news source for the edification of Long Island, Bronx, Brooklyn, and other communities.

Due to the pre-merger journalistic freedom provided by Cablevision's ongoing financial support, the employees of News 12 were able to pursue important stories addressing significant local issues relevant to millions of individuals residing in the coverage area.

No news station would have otherwise had the resources to uncover and report these vital stories.

News 12 was and is of singular importance to the Dolan Family, News 12's employees, and the viewers within News 12's coverage community.

About Altice

Altice USA (NYSE: ATUS) is a Delaware corporation. Altice Europe is a Dutch company. Altice Europe is successor in interest to Altice N.V., and thereby bound to the terms of the 2016 Merger Agreement.

Altice USA is one of the largest broadband communications and video service providers in the United States, delivering broadband, pay television, telephony services, proprietary content and advertising services to approximately 4.9 million residential and business customers across 21 states through its Optimum and Suddenlink brands.

Full Text of Letter from Patrick Dolan to News 12 Employees, December 21, 2018

"To my News 12 family:  

"Merry Christmas and Happy Holidays. Miss you all! 

"Let me give you a quick update on the lawsuit I filed last September to protect News 12 and its employees.  

"Because of certain ethical rules concerning settlement negotiations I can't tell you exactly what's going on. But I can say this: I will not accept any settlement that would allow Altice to violate News 12's high journalistic standards in the pursuit of ratings and profits.  

"I understand that in a recent staff meeting Altice execs told you that they never intended to make staff cuts this year.  

"If they said that, that is false.   

"Here are the facts:

"Late last year, I was shocked to learn that Altice senior management was planning another round of layoffs.  

"I immediately told Charlie Stewart, Co-President and CFO of Altice USA, that any further layoffs at News 12 would seriously damage the quality of the service. 

"Over the next months, Altice execs discussed numerous versions of plans to fire employees and eliminate jobs. These cuts included producers, directors, anchors, reporters and photographers. In addition, it was unclear what they intended to do with unfilled positions, meaning the cuts could have gone much deeper.  

"I lobbied hard against all these plans.  

"There were many phone calls, meetings and memos. I made the point repeatedly: Innovation is necessary, but not at the expense of News 12's tradition of journalistic quality.  

"I wrote several memos to Altice founder Patrick Drahi and met with him personally in New York City, asking him to head off the cuts.  

"In addition, I repeatedly reminded Charlie Stewart and Mike Schreiber, president of Altice USA News, that when Altice bought Cablevision the agreement Altice signed included promises to maintain staff levels and accept the business plan for five years. 

"We are in court because Altice failed to keep those promises.  

"According to the closing documents of the sale on [June, 2016], they were not to lay off employees for 5 years, and they were required to run the business according to Cablevision's last five-year plan. When I talked to Charlie about this, his response was that the News 12 part of the agreement is "unenforceable" … meaning Altice never intended to stand by its word.  

"In the end Altice somewhat reduced the number of jobs they were planning to cut this year. But I told them my "number" was "zero" cuts.  

"I also understand that in that recent staff meeting, Altice top execs assured you that the "restructuring" is finished. I'm not sure what that means, and given Altice's past conduct, those words are just not good enough.  

"In fact, Altice founder Patrick Drahi told me that in his view any company that fails to make a certain annual profit margin should cut operating costs by 10%. 

"I disagree. A newsroom is more than its balance sheet.  

"I don't like this situation. I have nothing personally to gain from this lawsuit except a bunch of legal bills. But Altice signed a deal, and now they are breaking their promises. I'm just not good with that.  

"I am truly sorry for the disruption and anxiety all this has caused. You deserve so much better. I hope you agree that protecting jobs — and preserving News 12's proud tradition of excellence — is worth fighting for."

SOURCE The Dolan Family