Skadden and Cravath have advised on the settlement of the Murdoch Family Trust dispute and the related share offering, with the resolution of the long-running succession dispute announced by News Corp yesterday (8 September).
The settlement secures Lachlan Murdoch’s position as heir to Rupert Murdoch’s $60bn media empire. He will inherit control of Fox News, the Wall Street Journal, the New York Post, The Sun, and other outlets. The trusts also provide for Grace and Chloe, Rupert’s daughters with Wendi Deng.
The announcement marks the end of legal proceedings in Nevada concerning the Murdoch Family Trust, with News Corp stating that the trustee and beneficiaries had reached a mutual resolution. New trusts will be created for Lachlan, Grace and Chloe, while Murdoch’s other children, Prudence MacLeod, Elisabeth Murdoch, and James Murdoch, will cease to be beneficiaries of any trust holding News Corp shares.
As part of the settlement, trusts for the departing beneficiaries will sell around 14.2 million shares of News Corp’s Class B common stock in an underwritten public offering, with the selling stockholders to receive all proceeds.
Prudence, Elisabeth, and James will each receive approximately $1.1bn. In total, the three will exit with $3.3bn in value.
Skadden represented the remaining beneficiary trusts, while the departing beneficiaries were advised by Cravath and investment banking advisory firm Centerview Partners.
The New York based Skadden team included M&A partners Howard Ellin and Brandon Van Dyke, and tax partner Gavin White, alongside private clients/trusts and estates partner Amy Heller, and banking partner Tracey Chenoweth.
The Cravath team was led by partners Gary Bornstein on litigation matters and Matthew Ploszek on corporate matters.
The outcome follows a protracted family battle. Before the settlement, the trust granted equal voting rights to Murdoch’s four eldest children. Murdoch had previously sought to amend the structure to favour Lachlan, but Nevada courts blocked that effort after a challenge from the three remaining children.
For the 94 year old Murdoch, the deal ends decades of family tension. The Murdoch Family Trust was created almost 30 years ago after his divorce from Anna Torv. Its governance has been the subject of contention ever since.
Skadden’s role continues a long history with News Corp. In 2012, the company turned to the firm as outside counsel on a plan that split Murdoch’s empire into two public companies.
