It’s been 14 years since Paul Carlucci, the former publisher of the New York Post and now the CEO of News America Marketing, both owned by News Corp., said the words, “I will destroy you!” in a meeting with a company that was resisting a potential acquisition by News.
So far, those words — and many other actions and policies that Carlucci allegedly either signed off on, or turned a blind eye to — have cost News Corp. $655 million in legal fees.
Now a retirement provider, the Iron Workers Mid-South Pension Fund, has sued the company alleging its stockholding in News Corp. was damaged by the legal actions, which are ongoing, according to Courthouse News.
News was originally sued by a variety of companies in the grocery and supermarket coupon business. They alleged that News America Marketing, which controlled roughly half the coupon business at the time, engaged in unlawful anti-competitive practices to maintain its dominance.
News lost a string of suits on the issue, eventually settling tem all for $655 million. But once details of how News had restricted clients from obtaining more competitive deals leaked out, some of those advertisers sued News, alleging their own damages. Dial Corp.and Heinz have both sued News with suits derived from the original allegations.
The pension fund suit alleges that these new lawsuits mean that News has not closed the can of worms that was opened back when it was first sued, and may yet suffer more liabilities, further damaging its stock. It claims the company is still under federal investigation for allegedly hacking into the computers of a rival coupon company, for instance. So-called “derivative” suits from stockholders are common and often opportunistic among public companies.
The “I will destroy you!” quote has become infamous in the grocery business. It came at a lunch between executives of News America Marketing and Floorgraphics, another company that offered in-store ads inside supermarkets. Courthouse News says the meeting went badly:
“Defendant Carlucci made no secret that defendant R. Murdoch was personally instructing him to go after News America’s competitors,” the complaint states. “In fact, according to the founders of Floorgraphics, George and Richard Rebh, defendant Carlucci once told them, ‘I will destroy you. I work for a man who wants it all, and doesn’t understand anybody telling him he can’t have it all.’ The ‘man’ defendant Carlucci was referring to, of course, was defendant R. Murdoch.”
The case was filed June 7. News Corp. did not immediately respond to a request for comment.
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