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EFiled: Sep 04 2018 03:17PM EDT

Transaction ID 62407804
Case No. 2018-0651-
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

:
CHARLES F. DOLAN, HELEN A. :
DOLAN, JAMES L. DOLAN, :
PATRICK F. DOLAN, and :
COLLEEN McVEY, :
:
Plaintiffs, :
:
v. : C.A. No.
:
ALTICE USA, INC., and :
ALTICE EUROPE N.V., :
:
Defendants, :
:
and :
:
CABLEVISION SYSTEMS :
CORPORATION, :
:
Nominal Defendant. :
:

PLAINTIFFS’ COMBINED BRIEF IN SUPPORT OF THEIR (I) MOTION


TO EXPEDITE AND (II) MOTION FOR A TEMPORARY RESTRAINING
ORDER AND FOR PRELIMINARY INJUNCTION

OF COUNSEL: John L. Reed (I.D. No. 3023)


Ethan H. Townsend (I.D. No. 5813)
Robert M. Hoffman Peter H. Kyle (I.D. No. 5918)
James C. Bookout DLA PIPER LLP (US)
DLA PIPER LLP (US) 1201 North Market Street, Suite 2100
1717 Main Street, Suite 4600 Wilmington, Delaware 19801
Dallas, TX 75201 (302) 468-5700
(214) 743-4500 (302) 394-2341 (Fax)
(214) 743-4545 (Fax)
Attorneys for Plaintiffs
DATED: September 4, 2018

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TABLE OF CONTENTS
PAGE

PRELIMINARY STATEMENT ............................................................................... 1

FACTUAL BACKGROUND .................................................................................... 4

A. News 12 ........................................................................................................... 4

B. The Merger Agreement ................................................................................... 6

C. Altice Refuses To Keep Its Promise, Harming News 12, Its


Employees And The Public ........................................................................... 10

ARGUMENT ........................................................................................................... 14

I. APPLICABLE STANDARDS ...................................................................... 14

II. PLAINTIFFS HAVE STATED A NUMBER OF


COLORABLE CLAIMS ............................................................................... 15

III. PLAINTIFFS WILL SUFFER IRREPARABLE HARM


ABSENT A TRO FOLLOWED BY OTHER INJUNCTIVE
AND EQUITABLE RELIEF......................................................................... 18

IV. THE BALANCE OF EQUITIES FAVORS A TRO AND


OTHER INJUNCTIVE AND EQUITABLE RELIEF
AGAINST ALTICE....................................................................................... 22

CONCLUSION ........................................................................................................ 24

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TABLE OF AUTHORITIES

CASES PAGE(S)

AM Gen. Hldgs. LLC v. Renco Gp., Inc.,


2012 WL 6681994 (Del. Ch. Dec. 21, 2012)..........................................18, 19, 21

Arkema Inc. v. Dow Chem. Co.,


2010 WL 2334386 (Del. Ch. May 25, 2010)................................................14, 15

Brown v. T-Ink, LLC,


2007 WL 4302594 (Del. Ch. Dec. 4, 2007)........................................................ 15

Cirrus Hldg. Co. v. Cirrus Indus., Inc.,


794 A.2d 1191 (Del. Ch. 2001) .......................................................................... 18

In re SunGard Data Systems, Inc. Shareholders Litig.,


2005 WL 1653975 (Del. Ch. July 8, 2005) ........................................................ 15
Kaiser Aluminum Corp. v. Matheson,
681 A.2d 392 (Del. 1996) ................................................................................... 15
Mitsubishi Power Sys. Ams., Inc. v. Babcock & Brown Infrastructure
Group US, LLC,
2009 WL 1199588 (Del. Ch. Apr. 24, 2009) ...................................................... 14
Newell Rubbermaid Inc. v. Storm,
2014 WL 1266827 (Del. Ch. Mar. 27, 2014) ...............................................14, 15
Reserves Dev. Corp. v. Wilm. Trust Co.,
2008 WL 4951057 (Del. Ch. Nov. 7, 2008) ....................................................... 15

Stirling Inv. Hldgs., Inc. v. Glenoit Universal, Ltd.,


1997 WL 74659 (Del. Ch. Feb. 12, 1997) .......................................................... 22

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PRELIMINARY STATEMENT

Plaintiffs Charles F. Dolan, Helen A. Dolan, James L. Dolan, and Patrick F.

Dolan (together, the “Dolan Plaintiffs”) and Collen McVey (“McVey,” and

collectively with the Dolan Plaintiffs, the “Plaintiffs”) submit this brief in support

of their Motion for a Temporary Restraining Order and for Preliminary Injunction,

to Expedite these Proceedings (the “Motion”).

As set forth in detail in Plaintiffs’ Verified Complaint (cited as “Compl.”),

the main issue in this case is whether Defendants may terminate numerous “News

12” employees after Defendants explicitly stated in a binding $17.7 billion merger

agreement that they would not terminate News 12 employees through the year

2020.

The Court should enter an injunction to prevent Altice USA, Inc. and its

associates (“Altice”) from flouting its negotiated promise to stand by the

employees of News 12 Networks, LLC (“News 12”), a highly respected group of

local television news channels based in Long Island, and other areas of New York,

Connecticut, and New Jersey. News 12 is the premier local news provider in these

locales, providing reliable, hyper-local, network-quality news coverage 24 hours a

day. For a local television provider, it is virtually unique in the depth and

sophistication of the content it provides to the public.

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Altice made a solemn and express promise to the Dolan Plaintiffs and to

News 12’s employees, including Plaintiff McVey, under the terms of a written

Agreement and Plan of Merger dated September 16, 2015 (the “Merger

Agreement”) to operate News 12 in accordance with its existing, written business

plan (the “News 12 Business Plan”) through at least the end of the year 2020.

News 12 is a subsidiary of Cablevision Systems Corporation (“Cablevision”),

which Altice’s predecessor-in-interest Altice N.V. acquired under the Merger

Agreement.

The Dolan Family originally did not want to sell News 12 to Altice along

with Cablevision’s other assets. It worried that Altice would skinny down News

12 to the point where it could no longer provide in-depth, high quality content to

its viewers. The Dolan Family resisted selling News 12 until Altice agreed to

strong contractual protections for News 12 and its employees. Only then did the

Dolan Family agree to the transfer of ownership. In this regard, Altice expressly

agreed to incur up to $60 million in losses to maintain News 12’s existing level of

462 employees. This agreement was unusual for a merger transaction of this type,

reflecting the importance that preserving News 12’s quality and legacy, and

protecting its employees, had to the Dolan Family.

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Altice’s representations and promises, however, proved hollow. Altice has

laid off many of News 12’s employees—in direct violation of the News 12

Business Plan under the Merger Agreement. Now, Altice has informed Plaintiff

Patrick Dolan that it is on the verge of terminating still dozens more News 12

employees (including Ms. McVey), threatening to irreparably harm the quality of

the local news content that News 12 creates, and to deprive yet more employees of

the specific protections that the Dolan Plaintiffs fought for in the Merger

Agreement. With respect to Ms. McVey, she is being deprived of the rights

guaranteed to her under the Merger Agreement, not for any economic reason, but

because, in the words of Altice’s President of News, he wants a “fresh look.”

Plaintiffs seek injunctive relief to prevent Altice from irreparably injuring

News 12 employees under this scheme.

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FACTUAL BACKGROUND

A. News 12

News 12 is a group of cohesive, regional cable news television channels

serving nearly 3 million households in New York, Connecticut, and New Jersey,

including two boroughs of New York City and most of Long Island. (Compl.

¶ 21.) News 12 provides news coverage 24 hours a day, and focuses on providing

award-winning, hyper-local, in-depth news coverage that is virtually unique in the

United States, particularly with respect to the region it serves. (Id.)

The Dolan Plaintiffs are prominent, respected members of the “Dolan

Family,” who founded and ran Cablevision until it was sold to Altice in June 2016

in a $17.7 billion transaction. (Compl. ¶ 22.) Collectively, members of the Dolan

family (including the Dolan Plaintiffs) (the “Dolan Family”) held a controlling

interest in Cablevision throughout its pre-merger existence. (Id.) Plaintiff Charles

F. Dolan is the founder and former CEO of Cablevision; his son, Plaintiff James L.

Dolan, later assumed the role as CEO and was still in that position at the time of

the sale. (Id.) Plaintiff Patrick F. Dolan was the President of News 12, a wholly-

owned subsidiary of Cablevision. (Id.)

Plaintiff McVey is an Emmy award-winning news anchor who has worked

at News 12 for more than 30 years. (Compl. ¶ 23.) She appears on air at News

12’s premier network, News 12 Long Island, where she is one of its most

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recognizable public faces. (Id.) In her 30 years at News 12, Ms. McVey has

covered some of Long Island’s most memorable and historic events. (Id.) She

anchored News 12’s live breaking news coverage of the Avianca Plane Crash in

Cove Neck in 1990, the Long Island Railroad massacre in 1993, the TWA Flight

800 disaster in 1996, the aftermath of the 9/11 terror attacks, Hurricane Irene, and

Super Storm Sandy. (Id.)

Cablevision has at all times relevant provided cable and other

telecommunications services throughout the New York City area. (Compl. ¶ 24.)

Due to News 12’s inherent value to the communities it serves, it was of particular

importance to the Dolan Family, regardless of the fact that it historically operated

at a substantial financial loss. (Id.) In fact, the Dolan Family considered it to be

one of Cablevision’s most cherished assets—the crown jewel as it were—and felt

immense pride in the public service News 12 provides to the community. (Id.) So

much so, that the Dolan Family (and other stockholders) at first refused to sell

News 12. (Id.) In light of the significant value of News 12 to the community and

news industry, during negotiations with Altice leading up to the 2016 Merger, the

Dolan Family insisted that the News 12 asset be spun off and not controlled by

Altice. (Id.) Ownership of News 12 became a sticking point for the parties, as

Altice wanted to capture the revered organization’s inherent brand value. (Id.)

The Dolan Family ultimately agreed to convey the News 12 asset together with

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Cablevision, but only if Altice would agree to provide specific written assurances

regarding the continued operation of News 12 consistent with its rich legacy. (Id.)

That is, they only capitulated when Altice offered, negotiated, and expressly

agreed to a binding commitment from Altice to safeguard News 12’s employees

and their salaries, so the staff could continue providing the News 12 community

with high quality, local news coverage that would not otherwise exist. (Id.)

B. The Merger Agreement

On September 16, 2015, Cablevision, Altice N.V., and Neptune Merger Sub

Corp. entered into the Merger Agreement. (Compl. ¶ 25.) Altice Europe and

Altice USA are both successors-in-interest to Altice N.V.’s interest, rights, duties,

and obligations under the Merger Agreement. (Id.)

Under the Merger Agreement, the Dolan Family negotiated very significant

and fair consideration for Cablevision’s stockholders, including approximately

$17.7 billion in cash payments from Altice. (Compl. ¶ 26.) The stockholders

received the cash payments for their shares directly from funds placed in trust for

this purpose by Altice. (Id., Ex. A §§ 4.1(a), 4.2(a).) At closing, all Cablevision

shares were automatically converted into a right to receive the full consideration

provided under the Merger Agreement. (Id.)

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In addition to the cash payment for Cablevision’s shares, the enduring

legacy and continued independence of News 12 and its employees, and News 12’s

ability to provide the same high quality, hyper-local news content, was just as

important and material as the cash consideration. (Compl. ¶ 27.) As controlling

stockholders in Cablevision, the Dolan Family’s approval was both legally and

practically necessary for the Merger to occur. (Id.)

The Dolan Family negotiated comprehensive protections for News 12 and its

employees. (Compl. ¶ 28.) These provisions were clear and specific, unusual in

such a transaction, negotiated with the intent to maintain the quality of the local

news content produced by News 12, and designed to protect News 12 employees

and their salaries for an extended and fixed period. (Id.)

In particular, Section 6.4(f) of the Merger Agreement provides:

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(Compl. ¶ 29.) “Parent,” as used in Section 6.4(f), refers to Altice N.V. (Id.)

Thus, Altice unambiguously agreed to operate News 12 substantially in accordance

with the News 12 Business Plan through at least the end of 2020. (Id.)

The News 12 Business Plan, which was incorporated into the Merger

Agreement by reference and attached as Schedule 6.4(f) to Cablevision’s

Disclosure Letter, provided that News 12 would employ a full-time equivalent

headcount of exactly 462 employees in each of years 2016, 2017, 2018, 2019, and

2020. (Compl. ¶ 30 & Ex. B.) In doing so, Altice expressly recognized and

accepted expected losses of $60 million, primarily driven by expenses related to

employee compensation necessary to maintain the quality and legacy of News 12.

(Id.) The headline summary of the News 12 Business Plan is set forth below:

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As noted, Section 6.4(f) of the Merger Agreement incorporates Schedule

6.4(f) of Cablevision’s Disclosure Letter by reference. (Compl. ¶ 31 & Ex. A

§ 6.4(f).) Schedule 6.4(f) provides:

Thus, Altice agreed to continue to employ 462 full-time employees at News 12,

even if it incurred cumulative losses of $60 million, which loss threshold has never

occurred. (Compl., Ex. A § 6.4(f).)

Altice’s additional consideration in the form of protective covenants for

News 12 and its employees was profoundly important to Cablevision stockholders,

including the Dolan Family. (Compl. ¶ 32.) The Dolan Family deliberately and

methodically built News 12 as the foremost hyper-local news source for the

edification of the Long Island, Bronx, and Brooklyn communities. (Id.) Due to

the pre-merger journalistic freedom provided by Cablevision’s ongoing financial

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support, the amazing employees of News 12 were able to pursue important stories

addressing significant local issues relevant to millions of individuals residing in the

coverage area. (Id.) No news station would have otherwise enjoyed the resources

to uncover and report these vital stories. (Id.) News 12 was and is of singular

importance to the Dolan Family and the viewers within News 12’s coverage

community. (Id.)

In conjunction with the Merger Agreement, the Dolan Family informed

News 12’s employees and the public at large, including Ms. McVey, that it had

negotiated this provision to protect News 12 and its employees after Closing.

Indeed, the negotiated News 12 protection was part of the disclosures that

Cablevision provided to its stockholders regarding the Merger in its Information

Statement. (Compl. ¶ 33 & Ex. C (“Altice has agreed that it will operate News 12

Networks substantially in accordance with the existing News 12 Networks

business plan [] through at least the end of the plan year 2020.”).)

C. Altice Refuses to Keep Its Promise, Harming News 12, its Employees,
and the Public

For the nine months between execution of the Merger Agreement on

September 16, 2015, through its closing on June 21, 2016 (the “Closing”), the

Dolan Family (including the Dolan Plaintiffs) performed their side of the bargain

with Alticei.e., they honored the obligations in Section 6.4(f) of the Merger

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Agreement to operate News 12 according to the agreed upon News 12 Business

Plan. (Compl. ¶ 34.)

At some time prior to or after Closing, Altice N.V. assigned or contributed

its rights with respect to Cablevision to Altice USA. (Compl. ¶ 35.) In June 2017,

Altice USA went public, and its shares now trade on the New York Stock

Exchange independently of shares in Altice N.V. (Id.) Altice N.V. later

completed a corporate separation from Altice USA, in which owners of shares in

Altice N.V. received equivalent shares in Altice USA, which became an

independent company. (Id.) As a part of that separation, Altice N.V. was renamed

Altice Europe. (Id.)

On June 21, 2016, Altice began to operate News 12 and was required by a

solemn and express promise embodied in the Merger Agreement to continue

operating News 12 in accordance with the News 12 Business Plan. (Compl. ¶ 36.)

At all times relevant, however, Altice disregarded its promise to operate

News 12 according to the News 12 Business Plan. (Id. ¶ 37.) As evidence of such

disregard, and in direct contravention of the Merger Agreement, Altice terminated

a significant number of employees at News 12 in 2017. (Id.)

Specifically, in the spring of 2017, Altice cut 70 positions at News 12,

resulting in the layoffs of dozens of employees. (Compl. ¶ 38.) These layoffs

reduced News 12’s salary spend by approximately $7 million, which was

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approximately $5 million more in reduced staff positions than Section 6.4(f) of the

Merger Agreement permitted. (Id.) Thus, Altice’s employee terminations were in

direct violation of Section 6.4(f). (Id.) As a result of these terminations, News

12’s quality suffered, employees’ jobs that should have been protected by the

Merger Agreement were lost, and the Dolan Family reputation was tarnished. (Id.)

Altice, however, is not finished violating its contractual obligations or

harming employees’ livelihoods. (Id. ¶ 39.) On or about August 29, Altice

informed Plaintiff Patrick Dolan that it intends to conduct further layoffs and place

still more News 12 employees on the chopping block, starting September 6, 2018.

(Id.) Similarly, Altice’s controlling stockholder, Patrick Drahi, confirmed the

imminent layoffs to Plaintiff Patrick Dolan in writing on August 21, 2018, over

Mr. Dolan’s strong protest. (Id.) Since News 12 is and has been making a profit

for Altice, it is impossible for Altice to justify these layoffs under the Merger

Agreement. (Id.)

If carried out, each of these terminations will be in disregard and violation of

Section 6.4(f). (Compl. ¶ 40.) Moreover, the planned layoffs will only further

decrease News 12’s ability to provide the same intensive local news coverage that

the viewing community has come to expect from News 12. (Id.)

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One of the News 12 employees that Altice plans to imminently terminate is

Plaintiff McVey. (Compl. ¶ 41.) There is no cost reduction rationale associated

with ending Ms. McVey’s employment. (Id.) In fact, she is one of News 12 Long

Island’s most renowned news anchors, having faithfully worked there for over 30

years. (Id.) Further, she scores well above average in tests among members of

News 12’s primary demographics. (Id.) Rather, the sole stated reason for her

impending termination, according to Michael Schreiber, President of Altice USA

News, is that Altice wants a “fresh look.” (Id.) Thus, Altice has given up any

pretext of economic necessity, choosing to capriciously focus on Ms. McVey’s

“look” over her obvious talent and popularity with viewers. (Id.)

For the sake of News 12 employees and the viewing public—both of whom

Altice agreed to protect for five years—Altice must be required to adhere to its

commitment in the Merger Agreement. (Compl. ¶ 42.) For this reason, as

stockholders entitled to receive the full consideration they bargained for, and as an

employee entitled to benefit from the protective covenants the Dolan Family

obtained for their benefit, the Dolan Plaintiffs and Ms. McVey bring this action to

enforce the express representations that Altice has made and forsaken. (Id.)

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ARGUMENT

I. APPLICABLE STANDARDS

The standards for a TRO, expedited proceedings, and a preliminary

injunction have some overlap and are similar.

The purpose of a temporary restraining order is “to protect the status quo and

to prevent imminent and irreparable harm from occurring before a preliminary

injunction hearing or the final resolution of a matter.” Newell Rubbermaid Inc. v.

Storm, 2014 WL 1266827, at *4 (Del. Ch. Mar. 27, 2014). Under Delaware law, a

court may issue a TRO if a plaintiff demonstrates: “(i) the existence of a colorable

claim, (ii) the irreparable harm that will be suffered if relief is not granted, and (iii)

a balancing of hardships favoring the moving party.” Arkema Inc. v. Dow Chem.

Co., 2010 WL 2334386, at *3 (Del. Ch. May 25, 2010). Because the purpose is

merely to preserve the status quo pending a preliminary injunction hearing or final

resolution, the plaintiff is required to show only that “a colorable claim has been

made out if the facts alleged are [treated as] true.” Mitsubishi Power Sys. Ams.,

Inc. v. Babcock & Brown Infrastructure Group US, LLC, 2009 WL 1199588, at *3

(Del. Ch. Apr. 24, 2009) (citing UIS, Inc. v. Walbro Corp., 1987 WL 18108, at *1

(Del. Ch. Oct. 6, 1987)). A plaintiff’s required showing on the merits is “less

exacting” at the TRO stage than at the preliminary injunction stage because of the

absence of expedited discovery and the limited time the Court has to address the

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issues. Arkema Inc., 2010 WL 2334386, at *3. Rather, the “chief focus” when

reviewing a TRO motion is “the nature and imminence of the allegedly impending

injury.” Id. (quotation omitted).

Similarly, when a plaintiff “articulate[s] a sufficiently colorable claim and

show[s] a sufficient possibility of a threatened irreparable injury,” expedited

proceedings are permitted. In re SunGard Data Systems, Inc. Shareholders Litig.,

No. 1221-N, 2005 WL 1653975, at *1 (Del. Ch. July 8, 2005).

Finally, to obtain a preliminary injunction, the plaintiff must show: (1) a

reasonable probability of success on the merits at trial, (2) that a failure to issue the

injunction will result in immediate and irreparable harm, and (3) that the balance of

equity favors granting injunctive relief. Kaiser Aluminum Corp. v. Matheson, 681

A.2d 392, 394 (Del. 1996). While each element must be shown, a “strong

demonstration as to one element may serve to overcome a marginal demonstration

of another.” Brown v. T-Ink, LLC, 2007 WL 4302594, at *13 (Del. Ch. Dec. 4,

2007).

II. PLAINTIFFS HAVE STATED A NUMBER OF COLORABLE


CLAIMS

The “colorable claim” requirement for a TRO requires that a plaintiff show

“essentially a non-frivolous cause of action.” Newell, 2014 WL 1266827, at *9

(citation omitted); see also Reserves Dev. Corp. v. Wilm. Trust Co., 2008 WL

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4951057, at *2 (Del. Ch. Nov. 7, 2008) (describing the “lenient standard” plaintiff

faces).

Plaintiffs have alleged a number of colorable causes of action. In particular,

they have alleged claims for breach of contract and breach of the implied duty of

good faith and fair dealing (and have requested the remedy of specific

performance); equitable fraud; promissory estoppel; negligent misrepresentation;

and declaratory relief.

As discussed above and shown by their Verified Complaint, the Dolan

Plaintiffs specifically obtained express protections for News 12 from Altice. The

Merger Agreement requires Altice to operate News 12 in compliance with the

News 12 Business Plan, which specifically provides for a headcount of 462 full-

time equivalent employees in the years 2016, 2017, 2018, 2019, and 2020.

(Compl. ¶¶ 29-30.) The Dolan Plaintiffs obtained this not only as part of the

consideration they would receive as shareholders, but also to intentionally benefit

News 12’s employees. (Id. ¶ 32.)

Altice has previously cut 70 positions at News 12, resulting in the layoffs of

dozens of News 12 employees, and it admittedly plans to terminate more—on

September 6, 2018. (Compl. ¶¶ 38-41.) This is manifestly a breach of the explicit

terms of Section 6.4(f) of the Merger Agreement. (Id. ¶¶ 43-60.) Additionally, it

constitutes a breach of the implied covenant of good faith and fair dealing because

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Altice has attempted to unreasonably use its control of Cablevision to thwart

enforcement of the bargained-for protections in Section 6.4(f). (Id.)

Altice’s has no valid justification for breaching its promise not to terminate

News 12’s employees. Ms. McVey, age 60, is a longstanding, prominent

newscaster at News 12 who tests well above average in News 12’s target

demographic. (Compl. ¶¶ 9, 41.) According to the President of Altice USA News,

Michael Schreiber, the reason for her impending dismissal, in violation of Altice

USA’s written representations, is that Altice wants a “fresh look.” (Id.) Her

imminent termination, in violation of Altice’s written agreement not to do so, isn’t

based on cost reduction, but rather personal appearance and prejudicial attitudes

regarding age. (Id.)

Altice’s statements in the Merger Agreement constituted express

representations to the Dolan Plaintiffs that Altice would retain the historical level

of employees, who had created News 12’s high quality news programming, even if

it caused significant losses. (Compl. ¶¶ 39-41.) Without such content, the people

of Long Island, the Bronx, Brooklyn, and areas of New Jersey and Connecticut

will be deprived of a unique and irreplaceable source of news regarding events

important to them. (Id. ¶¶ 32-33.) Nevertheless, Altice’s promises were untrue,

and were made carelessly and without regard to any real commitment to the

obligations it undertook with respect to News 12 in the Merger Agreement, and its

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failure to disclose those facts to Cablevision’s shareholders, including the Dolan

Plaintiffs, constituted negligent misrepresentation and equitable fraud. (Id. ¶¶ 65-

77.) Indeed, the Dolan Family would not have voted for the Merger except for

their justifiable reliance on Altice’s written representation that it would operate

News 12 according to the News 12 Business Plan through at least 2020. (Id. ¶¶ 49,

51-52.)

Clearly, Plaintiffs have pleaded colorable causes of action against Altice.

III. PLAINTIFFS WILL SUFFER IRREPARABLE HARM ABSENT A


TRO FOLLOWED BY OTHER INJUNCTIVE AND EQUITABLE
RELIEF

Irreparable harm means “harm for which there can be no remedy at law,

which is typically taken to mean that an award of compensatory damages will not

suffice.” AM Gen. Hldgs. LLC v. Renco Gp., Inc., 2012 WL 6681994, at *4 (Del.

Ch. Dec. 21, 2012) (quotation omitted). However, “‘[i]t is not necessary that the

injury be beyond the possibility of repair by money compensation but it must be of

such a nature that no fair and reasonable redress may be had in a court of law and

that to refuse the injunction would be a denial of justice.’” Id. (quoting State v.

Delaware State Educ. Ass’n, 326 A.2d 868, 875 (Del. Ch. 1974)).

Further, “[t]his Court has repeatedly held that contractual stipulations as to

irreparable harm alone suffice to establish that element for the purpose of issuing

preliminary injunctive relief.” Cirrus Hldg. Co. v. Cirrus Indus., Inc., 794 A.2d

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1191, 1209 (Del. Ch. 2001) (citing True North Commc’ns Inc. v. Publicis S.A., 711

A.2d 34 (Del. Ch. 1997); Vitalink Pharmacy Services, Inc. v. Grancare, Inc., 1997

WL 458494 (Del. Ch. Aug. 7, 1997)); see also AM Gen., 2012 WL 6681994, at *4

(“This Court has concluded that contractual stipulations as to irreparable harm

alone suffice to establish that element for the purpose of issuing preliminary

injunctive relief.”).

Here, irreparable harm will result unless the Court issues an injunction. It is

no secret that local news in the United States is rapidly disappearing in favor of

mass market publications and programming. News 12 is a vital source of unique

information for Long Island, the Bronx, Brooklyn, and certain other

communities—all areas that will otherwise lack an equivalent source of intensive,

local news coverage if News 12 can no longer provide it. (Compl. ¶¶ 39-41.)

Further, News 12 is unique in that it provides 24 hour daily programming on

par with the quality and professionalism of mainstream network news channels

such as CNN, but for a hyper-local audience in Long Island and surrounding areas.

(Compl. ¶¶ 21, 39-41.) This level of quality is one-of-a-kind and virtually unheard

of in local news programming. (Id.) Without News 12’s coverage, topics

important to local communities, including politics, sports, education, and more,

would have few, if any, outlets, let alone to the high standard attained by News 12.

(See id.)

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Additionally, News 12 owes its unparalleled quality to the journalists and

other staff it employs. (See Compl. ¶¶ 32-33.) Without those individuals, the

programming on News 12 will inevitably suffer. (See id. ¶¶ 39-41.) However,

Altice seeks to terminate those very individuals. (See id.) In particular, Altice has

indicated that it will terminate Ms. McVey, among numerous others, who tests well

above average in News 12’s target demographic. (Id. ¶ 41.) Ms. McVey’s

termination is not even an attempt to cut costs. (Id.) In fact, Michael Schreiber,

the President of Altice USA News, has stated that he only intends to terminate her

because Altice wants a “fresh look.” (Id.) This inappropriate motive is not

sufficient reason to terminate Ms. McVey in violation of the terms of the Merger

Agreement. Indeed, she is unlikely to be able to find a comparable position. (Id.)

On the other hand, she has worked at News 12 for more than 30 years, having

developed skills and connections in the local community that cannot be replaced.

(Id.)

Altice’s plan is to terminate Ms. McVey and others like her as part of its

plan to wantonly flout its contractual representations. News 12’s ability to provide

hyper-local news coverage has already suffered a significant decline in quality as a

result of Altice’s prior layoffs at News 12, and they will continue to do so if the

Court allows Altice to terminate yet more employees. (Compl. ¶¶ 39-41.)

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In any event, Altice itself agreed that violations of the Merger Agreement

would result in irreparable damages, and that injunctions would be appropriate to

prevent breaches of the Agreement and to enforce its terms and provisions:

(Compl. ¶ 55 & Ex. A § 9.5(b).) Thus, Altice’s own agreement conclusively

establishes that any failure to comply with the terms of Section 6.4(f) would be

irreparable and the necessity of injunctive relief. As noted above, such agreement

is in and of itself sufficient to establish irreparable harm. See AM Gen., 2012 WL

6681994, at *4.

Additionally, the Dolan Plaintiffs will suffer intense reputational damage

from Altice’s actions. The Dolan Family were not just controlling shareholders in

Cablevision—and thus, News 12—they were stewards of News 12’s content on

behalf of the communities it serves. (Compl. ¶¶ 38, 55, 69.) It was important to
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the Dolan Family to negotiate continued protection for News 12 and its employees.

(Id. ¶¶ 24, 55, 69.)

For these reasons, Plaintiffs will suffer irreparable injury unless the Court

issues an injunction to prevent further imminent layoffs. News 12 has already

suffered from Altice’s failure to comply with its express promises and

representations. Money cannot adequately measure Plaintiffs’ damages due to

Altice’s violations—the quality and reputation of News 12 are not replaceable,

regardless of how much money Altice is required to pay. Further, back wages

alone would be insufficient to compensate employees for the loss of their jobs,

which would have substantial impacts beyond the loss of income, including stress,

difficulty finding other employment, and damage to their professional reputations.

Thus, Plaintiffs and News 12 face an imminent threat of irreparable harm to News

12’s local news programming.

IV. THE BALANCE OF EQUITIES FAVORS A TRO AND OTHER


INJUNCTIVE AND EQUITABLE RELIEF AGAINST ALTICE

Lastly, the balance of the equities clearly weighs in favor of Plaintiffs. See

Stirling Inv. Hldgs., Inc. v. Glenoit Universal, Ltd., 1997 WL 74659, at *3 (Del.

Ch. Feb. 12, 1997) (balance of equities, requiring defendant to abide by terms of

agreement, favored plaintiff, even though defendant would suffer some risk of

harm).

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Plaintiffs face the threat of irreparable harm. News 12 simply cannot put

back together what is destroyed if Altice is allowed to move forward with its

planned layoffs. (Compl. ¶¶ 55-56, 59.) For instance, News 12 cannot simply hire

back or replace experienced reporters and staff with their sweat-earned connections

and sources in the communities. (See id.) Once Altice’s plan is accomplished,

News 12 will have been forever damaged. (See id.)

Moreover, Altice clearly promised that it would preserve News 12 and

operate it according to the News 12 Business Plan through at least the end of 2020.

(Compl. ¶ 30.) It cannot complain of being asked to adhere to its written

agreements. Altice went into that agreement open-eyed, with full knowledge that it

might incur future losses in an amount equal up to $60 million. (See id.) It also

knew from negotiations with the Dolan Family with respect to Section 6.4(f) of the

Merger Agreement that the protection of News 12 was an important inducement to

Plaintiffs and to Cablevision itself. (Id. ¶¶ 32-33.)

On the other hand, Altice faces little or no harm from an injunction. All an

injunction will prevent Altice from doing is violating its express written promises.

Altice cannot complain of losses from being required to do what it specifically

agreed to do.

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CONCLUSION

For these reasons, Plaintiffs respectfully request that the Court grant its

Motion and issue a TRO and, upon hearing, a preliminary injunction enjoining

Altice and its officers, agents, servants, employees, attorneys, and all others acting

in active concert with them from:

 Terminating the employment of any current employee of News 12


(other than in the ordinary course of business to replace such
individual for obvious cause with another person with equivalent
qualifications);

 Taking any action that would cause News 12 to cease to operate in


substantial compliance with the News 12 Business Plan; and

 Taking any action that would, in any way, violate or breach Section
6.4(f) of the Merger Agreement (including Schedule 6.4(f) to the
Company Disclosure Letter and any other document included by
reference in Section 6.4(f)).

Additionally, because Altice is threatening further imminent violations of Merger

Agreement Section 6.4(f), Plaintiffs request that the Court expedite these

proceedings and set a preliminary injunction hearing for the earliest available date.

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DATED: September 4, 2018 DLA PIPER LLP (US)

/s/ John L. Reed


John L. Reed (I.D. No. 3023)
OF COUNSEL: Ethan H. Townsend (I.D. No. 5813)
Peter H. Kyle (I.D. No. 5918)
Robert M. Hoffman 1201 North Market Street, Suite 2100
James C. Bookhout Wilmington, Delaware 19801
DLA PIPER LLP (US) (302) 468-5700
1717 Main Street, Suite 4600 (302) 394-2341 (Fax)
Dallas, TX 75201 john.reed@dlapiper.com
(214) 743-4500 ethan.townsend@dlapiper.com
(214) 743-4545 (Fax) peter.kyle@dlapiper.com
rob.hoffman@dlapiper.com
james.bookhout@dlapiper.com Attorneys for Plaintiffs

Words: 4,879

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