Actionable news
0
All posts from Actionable news
Actionable news in S: SPRINT CORPORATION,

Sprint Nextel: In The District Court Of Johnson County, Kansas

The following excerpt is from the company's SEC filing.

MONICA ROSS-WILLIAMS, derivatively, )

on behalf of SPRINT NEXTEL )

CORPORATION, )

Plaintiff, )

vs. ) Civil Action No. 11-cv-00890

ROBERT R. BENNETT, GORDON M. )

BETHUNE, LARRY C. GLASSCOCK, )

JAMES H. HANCE, JR., DANIEL R. HESSE, )

NOTICE OF PENDENCY AND

V. JANET HILL, IRVINE O. HOCKADAY, JR., )

PROPOSED SETTLEMENT OF

FRANK IANNA, SVEN-CHRISTER NILSSON, )

STOCKHOLDER ACTIONS

WILLIAM R. NUTI, RODNEY O’NEAL, GARY )

D. FORSEE, PAUL N. SALEH and WILLIAM )

G. ARENDT, )

Defendants, )

and )

SPRINT NEXTEL CORPORATION, a Kansas )

Corporation, )

Nominal Defendant. )

NOTICE OF PENDENCY AND PROPOSED SETTLEMENT

OF STOCKHOLDER ACTIONS

ALL RECORD AND BENEFICIAL OWNERS OF SPRINT CORPORATION (“SPRINT”) COMMON STOCK AS OF FEBRUARY 22, 2016, AND WHO CONTINUE TO HOLD THEIR SPRINT COMMON STOCK AS OF THE DATE OF THE SETTLEMENT HEARING, EXCLUDING THE INDIVIDUAL DEFENDANTS, THE OFFICERS AND DIRECTORS OF SPRINT, MEMBERS OF THEIR IMMEDIATE FAMILIES, AND ANY ENTITY IN WHICH INDIVIDUAL DEFENDANTS HAVE OR HAD A CONTROLLING INTEREST (“CURRENT SPRINT STOCKHOLDERS”).

PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. YOUR RIGHTS MAY BE AFFECTED BY LEGAL PROCEEDINGS IN THIS ACTION. THIS NOTICE RELATES TO A PROPOSED SETTLEMENT AND DISMISSAL OF STOCKHOLDER DERIVATIVE LITIGATION AND CONTAINS IMPORTANT INFORMATION REGARDING YOUR RIGHTS.

IF THE COURT APPROVES THE SETTLEMENT AND DISMISSAL OF THE ACTION, STOCKHOLDERS OF SPRINT WILL BE FOREVER BARRED FROM CONTESTING THE APPROVAL OF THE PROPOSED SETTLEMENT AND FROM PURSUING THE SETTLED CLAIMS. THIS ACTION IS NOT A “CLASS

ACTION.” THUS, THERE IS NO COMMON FUND UPON WHICH YOU CAN MAKE A CLAIM FOR A MONETARY PAYMENT.

THE COURT HAS MADE NO FINDINGS OR DETERMINATIONS RESPECTING THE MERITS OF THE ACTION. THE RECITATION OF THE BACKGROUND AND CIRCUMSTANCES OF THE SETTLEMENT CONTAINED HEREIN DOES NOT CONSTITUTE THE FINDINGS OF THE COURT. IT IS BASED ON REPRESENTATIONS MADE TO THE COURT BY COUNSEL FOR THE PARTIES.

YOU ARE HEREBY NOTIFIED

pursuant to Kansas law and an Order from the Honorable James F. Vano of the District Court of Johnson County, Kansas (the “Court”), that a proposed settlement agreement has been reached among Plaintiffs,

on behalf of themselves and derivatively on behalf of Sprint Nextel Corporation (now known as Sprint) and the Individual Defendants in connection with the above-captioned stockholder derivative action (the “

Ross-Williams

Action”) and substantially similar derivative actions pending in both the Court and United States District Court for the District of Kansas captioned

Randolph v. Forsee, et al

., No. 10CV06261 (Johnson Cnty. Dist. Ct., Kan.),

Price v. Forsee, et al

., No. 11CV03257 (Johnson Cnty. Dist. Ct., Kan.), and

Murphy v. Forsee, et al

., No. 2:09-cv-02242-EFM/KMH (D. Kan.), (collectively, with the

Action, the “Actions”). The Actions are respectively referred to herein as the

Ross-Williams

Action, and the

Action.

Plaintiffs filed the Actions derivatively on behalf of Sprint to remedy the alleged harm caused to the Company by the Individual Defendants’ alleged breaches of their fiduciary duties

___________________________

For purposes of this Notice, the Court incorporates by reference the definitions in the Parties’ Stipulation and Agreement of Settlement, fully executed as of February 22, 2016 (the “Stipulation”), and all capitalized terms used herein, unless otherwise defined, shall have the same meanings as set forth in the Stipulation. A copy of the Stipulation may be inspected at the Clerk of the Court’s Office for the District Court of Johnson County, Kansas, Johnson County Courthouse, 100 N. Kansas Ave., Olathe, KS, 66061-3273 or by visiting Sprint’s website at investors.sprint.com. The Stipulation is also available for viewing on the following websites www.weiserlawfirm.com and www.schubertlawfirm.com.

and other alleged misconduct. The proposed Settlement, if approved by the Court, would fully, finally and forever resolve the Actions on the terms set forth in the Stipulation and summarized in this Notice, including the dismissal of the Actions with prejudice.

As explained below, a Settlement Hearing will be held before the Court on May 26, 2016 at 9:00 a.m., before the Honorable James F. Vano, of the District Court of Johnson County, Kansas, Johnson County Courthouse, 100 N. Kansas Ave., Olathe, KS, 66061-3273, to determine (i) whether the terms and conditions of the Settlement set forth in the Stipulation are fair, reasonable, and adequate to Sprint and Current Sprint Stockholders

and should be finally approved by the Court; (ii) whether a Final Order and Judgment finally approving the Settlement, substantially in the form of Exhibit E attached to the Stipulation, should be entered, dismissing the

Action with prejudice and releasing and enjoining the prosecution of any and all Released Claims; and (iii) whether Plaintiffs’ Counsel’s Fee Award, including any Incentive Awards, should be finally approved. At the Settlement Hearing, the Court may also hear or consider such other matters as the Court may deem necessary and appropriate.

You have the right to object to the Settlement and the Fee Award in the manner provided herein. If you fail to object in the manner provided herein

at least fourteen (14) days prior to the Settlement Hearing

, you will be deemed to have waived your objections and will forever be foreclosed from making any objection to the fairness, reasonableness, or adequacy of the Settlement or the Fee Award, including any Incentive Awards, as set forth in the Stipulation,

3

Current Sprint Stockholders is defined as all record and beneficial owners of Sprint common stock as of February 22, 2016, and who continue to hold their Sprint common stock as of the date of the Settlement Hearing, excluding the Individual Defendants, the officers and directors of Sprint, members of their immediate families, and any entity in which Individual Defendants have or had a controlling interest.

unless otherwise ordered by the Court, but will be forever bound by the Final Order and Judgment to be entered, the dismissal of the Actions with prejudice, and any and all of the releases set forth in the Stipulation.

This Notice is not intended to be and should not be construed as an expression of any opinion by the Court with respect to the merits of the claims made in the Actions, but is merely to advise you of the proposed Settlement and of your rights as a Current Sprint Stockholder.

I. BACKGROUND

Allegations in the Actions

As alleged in the Actions, in December 2004, Sprint announced that it would acquire Nextel Communications (“Nextel”) in what was touted as a “merger of equals.” On August 12, 2005, Sprint completed the purchase of Nextel for $37.8 billion (the “Merger”).

In connection with the Merger, Sprint booked $15.6 billion - the amount that the purchase price exceeded the fair value of Nextel’s assets - as goodwill. This purchase price reflected anticipated synergies from integrating Sprint’s Code Division Multiple Access (“CDMA”) technology with Nextel’s proprietary network, called iDEN. However, according to the allegations raised in the Actions, integration efforts following the Merger were plagued by serious problems, including difficulty maintaining subscribers and Sprint's inability to successfully integrate the CDMA and iDEN technologies.

Plaintiffs alleged in the Actions that the Individual Defendants disseminated misleading public statements that concealed the significant post-Merger problems, including with regard to Sprint's subscriber base, the extension of credit, and difficulty consolidating the CDMA and iDEN networks. In addition, Plaintiffs have alleged that the Board approved stock buybacks that resulted in Sprint expending over $3.5 billion of Company money to repurchase its own stock at

inflated prices. According to allegations in the Actions, some insiders at Sprint also profited by selling their personal shares of Sprint stock while in possession of nonpublic information.

Ultimately, as alleged in the Actions, on February 28, 2008, the Company disclosed that it was going to record a non-cash goodwill impairment charge of $29.7 billion in the fourth quarter of fiscal year 2007. The next day, Sprint filed its Annual Report on Form 10-K for fiscal year 2007, which began to reveal information about, among other things, Sprint's subscriber loss and efforts at Sprint to extend credit to subscribers that were allegedly inconsistent with statements made to shareholders. On that date, Sprint’s stock fell by approximately 10%.

Procedural Background of the Actions

Action was initiated on April 3, 2009 in the State Court alleging that pre-suit demand on the Board was excused and asserting claims against the Individual Defendants for breaches of fiduciary duty, abuse of control, waste of corporate assets, and gross mismanagement. Defendants removed the

Action to the Federal Court on May 7, 2009.

On March 10, 2010, plaintiff Ross-Williams issued a pre-suit demand on the Board pursuant to Kan. R. Civ. P. 60-223A (the “Demand”). On November 15, 2010, counsel for Ross-Williams received a letter from the Company’s counsel, formally refusing the Demand. Plaintiff Ross-Williams filed the above-captioned

Action on Sprint’s behalf on February 25, 2011 in the State Court, alleging that the Demand had been wrongfully refused by the Board, and asserting claims against the Individual Defendants for breach of fiduciary duty, failure to properly oversee and manage the Company, unjust enrichment, abuse of control, and waste of corporate assets.

Plaintiff Murphy was...


More