Diller, on the witness stand, said "I expected John Malone to call me and apologize" Diller said he spent the next two weeks, like in a scene out of a movie, "waiting for the phone to ring."

At the time the article ran, IAC management was considering the spinoffs with a single tier voting structure. The article was the final straw: "They are trying to manipulate me. It's just too clear. It pushed me further."

Diller called the Journal story a "nasty article," and wondered, on the stand, "How could they be that mean? How could they be that hostile? I was embarrassed by it.

The next time he heard from Malone was December 21, when he conveyed, at some point in the conversation, the one-tier structure. At that moment, Diller told Malone, "You lost me."

In reply, Malone said they were headed toward a "messy public proxy fight." And Diller told him that he didn't care.

By the time of the December 21 call, Diller had already relayed the single-tier structure to former General Electric C.E.O. Jack Welch, who serves as a consultant to IAC and, Diller testified, is paid $1 million a year for his services.

Diller said he never would have agreed to give Liberty veto rights over his decision, as Liberty claims. Diller said the provision Liberty cites to back up its claim was intended to address regulatory concerns. Specifically, he added, concern about regulations barring cross-ownership of broadcast companies.

The provision was last modified in 2001, when IAC acquired an interest in Vivendi Universal Entertainment. Diller contradicted earlier testimony from Robert Bennett, Liberty Media's former chief executive, who said he had a conversation with Diller about the catchall veto provision.

"Did that conversation occur, Mr. Diller?" Theodore N. Mirvis of Wachtell, Lipton, Rosen & Katz, asked.

"No," Diller responded.

"Are you sure?" Mirvis asked.

"Absolutely," Diller said. "I would not have done the transaction—if anybody would have whispered it, an alarm bell would have gone off in my head."

Until 2001, Liberty had this transactional veto power, but gave it up in the Vivendi deal, with one caveat: It was subject to keeping IAC's debt under a certain limit.

Diller said he didn't have a problem with that. "That was okay with me," he testified. "I am fairly famous as someone who does not like excessive leverage."