U.S. District Judge John Lungstrum approved an agreement to settle a class action lawsuit between Sprint Nextel Corp. and being tied to the company’s stock degraded former employees who claim their retirement accounts for $29 million.
Lungstrum said the “conservative value” of the settlement was $25 million. He also said the company would pay $3.9 million in attorney fees and other expenses.
Plaintiffs claimed in their lawsuit that the company’s stock was too risky of an investment to be included in their retirement plans because, at the time, the company was laying the groundwork to switch from offering traditional telephone services to one that dealt only with wireless services.
The suit also claimed the company didn’t release key details of its proposed, and ultimately failed, merger with WorldCom Inc. In addition, it claimed the company’s former auditor, Ernst and Young, had a conflict of interest with former Chief Executive William Esrey and former Chief Operating Officer Ron LeMay.