Gemstar-TV Guide Regains $31.6M in Frozen Assets
Restricted bank account containing payments to former CEO Henry Yuen unlocked.
The Securities and Exchange Commission has approved Gemstar-TV Guide’s request to dissolve a court order that required the company to maintain a segregated account containing about $31.6 million.
The money had originally been set aside as payment to the company’s former CEO Henry Yuen for his 2002 management and corporate governance restructuring. However, Gemstar-TV Guide fired Yuen in 2003 under accusations that he had inflated the company’s revenue by more than $200 million. Three years later he was found guilty for securities fraud. The SEC froze the account containing the $31.6 million in 2003 after Gemstar challenged Yuen’s right to the payment.
Last year, an arbitration panel ruled that Yuen’s claims to the money were invalid and went on to award the company an additional $88.8 million in damages and interest. The SEC has now approved the company’s application to actually remove the restriction on the account.
“We are very pleased that the Court lifted the restrictions on the company’s use of this money," said Gemstar-TV Guide’s executive vice president and general counsel Stephen Kay in a statement. "The company’s victory against Mr. Yuen in the arbitration proceeding clearly established that these funds belong to the company and its shareholders. It follows that there is no longer any reason to continue the freeze order."
Gemstar-TV Guide, which is in the process of closing its $2.8 billion sale to Macrovision, will reclassify $31.6 million of restricted cash on its balance sheet to cash and cash equivalents for the end of the first quarter 2008.