August 05, 2006
Sprint Nextel Prevails in Litigation with Affiliates Horizon and Bright
Jennifer Walsh, 913-794-2950
RESTON, Va. — 08/05/2006
Sprint Nextel Corp. (NYSE: S) has prevailed in court on major issues asserted in litigation with two of its affiliates, Horizon and Bright. Vice Chancellor Donald Parsons of the Delaware Chancery Court issued the decision yesterday, which resolves the longstanding dispute between Sprint Nextel and these affiliates relating to the merger between Sprint and Nextel.
The Vice Chancellor found that Horizon and Bright abandoned the claim that the operation of the iDEN network in their territories would violate the parties' agreements. As such, the Court found that it was undisputed that Sprint Nextel may own, manage, and operate the Nextel iDEN network nationwide, including in these affiliates' territory, and may use the Sprint brand to promote iDEN products and services outside affiliate territories.
The Vice Chancellor also found no evidence that Sprint Nextel breached any of its confidentiality obligations to the affiliates, and declined to grant any relief against Sprint Nextel, holding that the confidentiality provisions in the parties' agreement were sufficient protection for the affiliates. The Court also rejected Plaintiffs' claims that Sprint Nextel improperly favored iDEN products and services. The Court found, among other things, that Sprint Nextel is free to sell iDEN products and services in Radio Shack stores in Plaintiffs' territories.
With respect to Plaintiffs' request for injunctive relief, while the Court found that Plaintiffs are entitled to limited injunctive relief, the Court's decision provides Sprint Nextel greater flexibility than the Forbearance Agreement that the parties have operated under since last July. The Forbearance Agreement expired upon the issuance of the Court's ruling. The Court held that Sprint Nextel may re-brand its Nextel stores to reflect the fact that Sprint and Nextel are one company and may use the Sprint name on Nextel stores and iDEN products and services. Under the Forbearance Agreement, Sprint Nextel refrained from using the word "Sprint" on iDEN products and services or legacy Nextel stores in Plaintiffs' territories.
Sprint Nextel is pleased with the outcome of this case and believes it provides an acceptable framework for Sprint Nextel and Horizon and Bright to continue operating under the existing management agreements.
About Sprint Nextel
Sprint Nextel offers a comprehensive range of communications services bringing mobility to consumer, business and government customers. Sprint Nextel is widely recognized for developing, engineering and deploying innovative technologies, including two robust wireless networks offering industry leading mobile data services; instant national and international walkie-talkie capabilities; and an award-winning and global Tier 1 Internet backbone. For more information, visit www.sprint.com.