Diamond Sports Group is taking its parent company to court. As part of its bankruptcy case, Diamond is suing Sinclair Broadcast Group, claiming the company received around $1.5 billion as a result of misconduct.
According to the filing, Diamond accuses Sinclair of “fraudulent transfers of assets, unlawful distributions and payments, breaches of contracts, unjust enrichment and breaches of fiduciary duties.”
In a filing with the SEC last week, Sinclair called the allegations “without merit” and stated it intends to take the issue to court.
Diamond alleges that the illicit transactions were unfair and designed to benefit only Sinclair. While Diamond Sports Group is a subsidiary of Sinclair Broadcast Group, it operates independently.
“Diamond Sports Group is seeking to vindicate its rights and protect the value of the Diamond bankruptcy estate, including by recovering value from Sinclair Broadcast Group that was improperly transferred from Diamond prior to its filing for bankruptcy in March 2023,” a spokesperson for Diamond said in a statement to The Baltimore Sun.
Sinclair is named as a defendant in the lawsuit as are multiple executives.
