Alltel settles class action suit

Alltel has settled a class action lawsuit involving sixteen shareholders who accused the company of breaching its fiduciary duties when it agreed in November 2007 to a private equity buyout deal worth $24.7 billion, plus the assumption of $2.7 billion in debt.

The settlement required Alltel officials to disclose information about other bids, according to Pulaski County Circuit Court Judge Chris Piazza. Piazza said that this was the best course of action for dissatisfied investors who believed the company was worth more than the $71.50 per share offered by the equity investors.

Alltel has suffered losses because of the equity buyout. In the second quarter, the company reported a loss of $69.9 million, due primarily to interest costs as well as depreciation and amortization expenses from the deal. Alltel, however, is now in the process of being acquired by Verizon Wireless. The deal, which was announced June 5, is expected to close by year-end.

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