From the Wires
Crest Financial Amends Complaint against Sprint and Clearwire
By: PR Newswire
Dec. 21, 2012 06:13 PM
WILMINGTON, Del., Dec. 21, 2012 /PRNewswire/ -- Crest Financial Limited, a Texas-based investment company and a substantial minority shareholder in Clearwire Corporation, today amended its complaint in the Court of Chancery here against Sprint Nextel Corporation and Clearwire.
The lawsuit now asserts that the proposed merger agreement between Sprint and Clearwire is "structurally coercive." Particularly onerous to Clearwire's minority shareholders is the $800 million convertible notes that Clearwire would issue to Sprint. Under this arrangement, Sprint would force Clearwire to further burden its balance sheet with debt, while at the same time Sprint would receive valuable exchange rights that would allow Sprint to convert this debt into Clearwire common shares at a very low price and thus further dilute Clearwire's minority shareholders.
Crest is also now asking the court to declare that Comcast, Intel and Bright House are affiliated with Sprint for the purpose of deciding how many shares are voted for or against the merger. A majority of unaffiliated shareholders' shares must approve the merger, and Crest asserts that the three companies' shares, which together comprise 13 percent of outstanding Clearwire voting shares, should not be counted because they have a side agreement with Sprint to vote for the merger.
The amended complaint can be found here: www.bancroftpllc.com/crest.
SOURCE Crest Financial Limited
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