Alltel Fends Off Class Action Lawsuit Over Private Equity Buyout

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Alltel Fends Off Class Action Lawsuit Over Private Equity Buyout

5:40 am on September 4, 2008 | Category: Business, Corporate, Law

Little Rock, Arkansas-based mobile phone operator, Alltel Corp., has successfully settled a class action lawsuit stemming from the company’s acquisition by private equity interests last year.

A total of sixteen shareholders filed legal complaints alleging that Alltel had breached its fiduciary duties when it agreed to be acquired and taken private in a deal worth $24.7 billion (plus the assumption of $2.7 billion in debt).

Pulaski County Circuit Court Judge, Chris Piazza, said that a settlement requiring Alltel officials to disclose information about other bids for Alltel “was the best possible course of action” for dissatisfied investors, who believed the company was worth more than the $71.50/share offered by the equity investors.

“The court has received, reviewed and considered the objections to the settlement filed by class members and finds such objections to be without merit,” the Judge stated. “Therefore, the objections are overruled in their entirety.”

The equity investors who purchased Alltel are currently in the process of selling it to larger rival, Verizon Wireless, for $28.1 billion.