Charter 2015 Annual Report Download - page 56

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consummation of the transactions between TWC and Charter, and must be approved by the New York Supreme Court. In the event
that the New York Supreme Court does not approve the settlement, the defendants intend to defend against any further litigation.
TWC, the TWC board of directors, Charter and the merger subsidiaries intend to defend vigorously any litigation filed.
On August 21, 2015, a purported stockholder of Charter filed a lawsuit in the Delaware Court of Chancery, on behalf of a putative
class of Charter stockholders, challenging the transactions between Charter, TWC, A/N, and Liberty Broadband announced by
Charter on May 26, 2015 (collectively, the “Transactions”). The lawsuit names as defendants Liberty Broadband, Charter, the
board of directors of Charter, and “New,” or post-Transaction, Charter. Plaintiff alleged that the Transactions improperly benefit
Liberty Broadband at the expense of other Charter shareholders, and that Charter issued a false and misleading proxy statement
in connection with the Transactions. Plaintiff requested, among other things, that the Delaware Court of Chancery enjoin the
September 21, 2015 special meeting of Charter stockholders at which Charter stockholders were asked to vote on the Transactions
until the defendants disclosed certain information relating to Charter and the Transactions. The disclosures demanded by the
plaintiff included (i) certain unlevered free cash flow projections for Charter and (ii) a Form of Proxy and Right of First Refusal
Agreement (“Proxy”) by and among Liberty Broadband, A/N, Charter and New Charter, which was referenced in the description
of the Second Amended and Restated Stockholders Agreement, dated May 23, 2015, among Charter, New Charter, Liberty
Broadband and A/N. On September 9, 2015, Charter issued supplemental disclosures containing unlevered free cash flow
projections for Charter. In return, the plaintiff agreed its disclosure claims were moot and withdrew its application to enjoin the
Charter stockholder vote on the Transactions. Charter has not yet responded to this suit but intends to deny any liability, believes
that it has substantial defenses, and intends to vigorously defend this suit.
On January 15, 2014, the California Department of Justice, in conjunction with the Alameda County, California District Attorney’s
Office, initiated an investigation into whether Charter’s waste disposal policies, practices, and procedures violate the provisions
of the California Health and Safety Code, the California Hazardous Waste Control Law, and any of their related regulations.
Charter is cooperating with the investigation. At this time Charter does not expect that the outcome of this investigation will have
a material effect on our operations, financial condition, or cash flows.
Patent Litigation
We are defendants or co-defendants in several unrelated lawsuits involving alleged infringement of various patents relating to
various aspects of our businesses. Other industry participants are also defendants in certain of these cases. In the event that a
court ultimately determines that we infringe on any intellectual property rights, we may be subject to substantial damages and/or
an injunction that could require us or our vendors to modify certain products and services we offer to our subscribers, as well as
negotiate royalty or license agreements with respect to the patents at issue. While we believe the lawsuits are without merit and
intend to defend the actions vigorously, no assurance can be given that any adverse outcome would not be material to our consolidated
financial condition, results of operations, or liquidity.
Other Proceedings
We are party to other lawsuits and claims that arise in the ordinary course of conducting our business, including lawsuits claiming
violation of wage and hour laws. The ultimate outcome of these other legal matters pending against us or our subsidiaries cannot
be predicted, and although such lawsuits and claims are not expected individually to have a material adverse effect on our
consolidated financial condition, results of operations, or liquidity, such lawsuits could have in the aggregate a material adverse
effect on our consolidated financial condition, results of operations, or liquidity. Whether or not we ultimately prevail in any
particular lawsuit or claim, litigation can be time consuming and costly and injure our reputation.
Item 4. Mine Safety Disclosures.
Not applicable.