The German media giant, the Kirch Gruppe, has been plunged into a potential financial crisis after the publisher Axel Springer announced it would exercise an option to sell the debt-ridden group a stake in one of its TV stations.
The move would force Kirch to cough up £467m and force the company into a serious financial crisis.
However, Kirch, which already owns 52.5% of the station, ProSieben-Sat1, is fighting the demand, claiming that Axel Springer's manoeuvre is legally void.
The "put" option was agreed in May 2000 and triggered yesterday after negotiations to postpone the payment collapsed.
Kirch, which owns the broadcasting rights to the World Cup, is groaning under £3.5bn worth of debt, mostly in the form of short term bank loans.
Because the majority of its most valuable assets are pledged as collateral for loans, Kirch would struggle to pay Axel Springer by the end of April as required.
In an effort to drag Axel Springer back to the negotiating table, Kirch took the unusual step of declaring the original agreement "legally void".
It claims Axel Springer had agreed to sell its stake in May but also agreed an option to postpone the sale until new capital gains tax laws came in.
"In our opinion and that of our lawyers that makes the agreement legally void," a Kirch executive tells the Financial Times.
By instigating legal action, Kirch could stall the payment for months or even years while legal proceedings take place.
Kirch is in talks with its creditor banks over restructuring its debt and it is thought the additional burden of the payment to Axel Springer will force the banks to take a harder line.
Another cloud on the horizon for Kirch is the fact that from October BSkyB can trigger a put option for 22% of the group's broadcasting business, forcing it to hand over a further £1.1bn.
Last year Kirch admitted it wouldn't be able to find the money if Rupert Murdoch's company exercised the option.
The latest developments could reignite the power struggle between old friends and adversaries John Malone, owner of Liberty Media and second biggest shareholder in Murdoch's News Corporation, and Murdoch himself - both of whom are thought to have their eyes on the Kirch empire.
Earlier this month, Malone abandoned plans to buy Murdoch's stake in Kirch after the German group's boss, Leo Kirch, objected.
