Nexstar violated a preliminary injuction on its pending $6.2 billion merger with Tegna when it appointed its officials into the latter’s board of directors, a federal judge ruled Thursday.
U.S. District Judge Troy Nunley said that the injuction, which he issued in April, does not allow current or former Nexstar personnel from serving on Tegna’s board. He ordered Nexstar to file a report within 10 days to ensure compliance.
“It is shocking that Defendants think installing a Board of Directors comprised primarily of Nexstar executives would not create influence over Tegna management,” the judge wrote Thursday. “This undermines Tegna as an independent entity and violates the preliminary injunction.”
A representative for Nexstar did not immediately respond to TheWrap’s request for comment.
A group of state attorneys general and DirecTV sought court intervention in July after Nexstar appointed its CEO Perry Sook, President Michael Biard, CFO Lee Ann Gilha and General Counsel Elizabeth Ryder and former Nexstar Broadcasting Inc. President Timothy Busch to sit on Tegna’s board of directors.
The plaintiffs argued the move enabled the company to “improperly control” Tegna and violated the court’s order for the companies to operate independently while the antitrust litigation proceeds.
On Thursday, Nunley ordered new steps to ensure Nexstar’s compliance with the injunction, including proving monthly board minutes and other documents to the plaintiffs. He also proposed appointing a special master to oversee compliance.
Nexstar’s actions “violated the preliminary injunction as clarified,” Nunley wrote. “Therefore, ongoing compliance monitoring and discovery is warranted in this case to ensure adherence to the preliminary injunction, particularly in light of Defendants’ lack of candor.”
Nunley set the preliminary injunction in April after the plaintiffs filed to block the merger in March. A day later the FCC approved the deal and Nexstar quickly closed it. The injuction has stalled the merger though, as it ordered the companies to remain operating separately while the legal process unfolded.