Score One for Diller in Liberty Media, IAC Battle

Liberty Media Corp. Chairman John Malone and IAC/InterActiveCorp Chairman Barry Diller have agreed to keep IAC's board intact until a March trial to settle their dispute over control of the company.

IAC’s board, chaired by Diller, includes in addition to Malone: William Berkman, Edgar Bronfman Jr., Victor Kaufman, Donald Keough, Bryan Lourd, Arthur Martinez, Steven Rattner, Gen. H. Norman Schwarzkopf, Alan Spoon and Diane Von Furstenberg.

Lawyers for both companies filed a proposed status quo order maintaining the board and allowing IAC's bylaws to stay in effect until the trial. The agreement prohibits IAC directors from taking any action outside routine operations without five days' advance notice to Liberty Media, according to a filing yesterday in the Chancery Court of Delaware.

The proposed order was submitted jointly by lawyers for both sides and formalized a deal worked out at the request of Chancery Judge Stephen Lamb. Earlier this month, Lamb asked both lawyers to say who would be in charge of New York-based IAC while lawsuits over the company's proposed spin-offs are pending.

Kevin Abrams, a lawyer for Liberty Media, which holds a 30-percent stake in IAC, said at the time that IAC would be governed by the board in place before the litigation began. Liberty Media opposes Diller's plan to split IAC into five companies and scrap a stock structure that gives Liberty Media voting control. The companies have traded lawsuits since Jan. 23, when IAC claimed Liberty threatened to block the breakup.

A Liberty filing to bar the spinoffs and oust Diller and six board members triggered the status quo request, which requires approval from Lamb to take effect.