IAC and Liberty Resolve Spinoff Dispute

SAN FRANCISCO - After months of legal wrangling, IAC/InterActive Corp. (IACI - Cramer's Take - Stockpickr) has finally begun to spin off its divisions into five publicly-traded companies.

The Internet conglomerate on Tuesday said it has resolved a dispute over the proposed restructuring of Liberty Media's(LINTA - Cramer's Take - Stockpickr) voting power in the new companies, allowing it to move ahead with initial filings with the Securities and Exchange Commission.

"Now it's really over and that's great for both of us," said IAC Chief Executive Barry Diller in a statement.

Diller had proposed the spin-offs in November but met with staunch resistance from Liberty, which owns a 30% stake in the company and claimed that its voting power of 62% through a second class of super-voting shares was being diluted under the plan.

Last month, a judge sided with IAC, saying that it did not need Liberty's approval for the spin-offs. But he also left open the possibility that Liberty could come back to sue IAC if its board agreed to restructure the company's voting power.

On Tuesday, IAC said that Liberty would no longer oppose the creation of a single-tier voting structure. Instead, the two companies have agreed to a number of arrangements, including Liberty's right to board representation on each of the spun-off companies. They have also agreed to limit Liberty's ability to increase its ownership stakes.

"I am pleased that we were able to amicably resolve our dispute with IAC," said Liberty Chairman John Malone in a statement. "Liberty supports the proposed restructuring of IAC and looks forward to the ongoing success of each of the new entities and IAC."