UMG president sues Univision

Behar accuses parent co. of equity fraud

Univision Music Group prexy Jose Behar has sued Univision Communications, accusing the parent company of harming the music division’s revs in order to pay less for his equity stake.

Univision placed the music unit on the block in July and is obligated to buy him out. It owns 90% of the division while Behar’s company, Diara, owns the remaining 10%.

New suit joins two others pending against Univision Music just as the new owners of the U.S. Hispanic media conglom come close to clinching a sale of this division. Universal Music is said to have the advantage although Sony/BMG and Warner Music Group remain strong bidders. New suit could raise more concerns among bidders who have already shaved $50 million off their initial offers to $200 million or less.

Other two lawsuits allege that Univision Music bribed radio stations and lashed out against execs who griped about the practice, commonly known as payola.

In his suit filed Nov. 21 at an L.A. court, Behar alleges that Univision breached its fiduciary duty to Diara by reducing TV advertising of the music unit, refusing to allow Behar to implement reduction in overhead and other costs or enter into favorable long-term pacts that would benefit the company.

Said breaches are said to have caused Diara damages exceeding $30 million.

Univision Communications has declined to comment. Lawyers for Behar also refused to comment.

Univision’s ownership changed hands in the spring when a private investor group led by Saban Capital bought it for $12.3 billion.

In addition to the Univision Network, the company’s holdings include the Telefutura Network, the Galavision cable network, a 62 TV stations and 70 radio stations.

A pending lawsuit from longterm programming supplier Televisa Mexico, which seeks to extricate itself from its pact with Univision, is scheduled for March.

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