Olathe, KS: (Sep-26-07) A class action lawsuit was brought against Sprint Nextel, alleging that the wireless phone company robbed billions of dollars from shareholders in 2004 when it decided to combine the stocks that tracked its wireless and traditional landline phone businesses. The suit claimed that the company undervalued the wireless business, giving them less for their shares.
In a settlement reached Sprint Nextel has proposed paying $57.5 million to settle the lawsuit. Johnson County District Judge Kevin Moriarty has given the settlement preliminary approval and has scheduled a hearing in December to consider giving it final approval. If approved, the payment would amount to 4.4 percent of $1.3 billion, the low end of estimated losses claimed by the plaintiffs. Sprint Nextel would pay $10 million, while insurance would cover the remaining $47.5 million. The company continued to deny any wrongdoing, saying it wanted to avoid the costs of continuing to fight the lawsuits. [KBSD NEWS: SPRINT SHAREHOLDERS]
