In Re Cellular Tel. P’ship Litig.

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Full Text of Court Cases
March 9, 2022
4813 Telephone Communications, Except Radiotelephone
517312 Wireless Telecommunications Carriers (except Satellite)
securities litigation, shareholder dissent/oppression
breach of fiduciary duty, buyout, cash flow, entire fairness, minority shareholder, projections, growth rate, burden of proof, distributions

In Re Cellular Tel. P’ship Litig.
2022 Del. Ch. LEXIS 56
United States
State Court
Delaware
Court of Chancery
Carlyn Taylor, J. Armand Musey, Lorraine Barrick
Laster

Summary

In this coordinated action involving 13 partnerships that were involved in freeze-out transactions by AT&T of minority shareholders, AT&T breached its fiduciary duties and effectuated the freeze-out through an unfair process and by paying an unfair price. The freeze-out was subject to the entire fairness standard of review. AT&T bore the burden of proving that the freeze-out was entirely fair to the minority partners. AT&T failed in that proof and thereby sought to capture future value for itself. AT&T did not employ any procedures that insured fairness to the minority partners. The lead partner of the valuation firm had a long-standing relationship with AT&T, and internal AT&T personnel influenced the outcome of the valuation. The court determined the fair value of the interest as a remedy to the situation.
In Re Cellular Tel. P’ship Litig.
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See Also

Delaware Chancery Court Rejects Partnership Valuation in a Freeze-Out as Unfair to Minority Partners

In this coordinated action involving 13 partnerships that were involved in freeze-out transactions by AT&T of minority shareholders, AT&T breached its fiduciary duties and effectuated the freeze-out through an unfair process and by paying an unfair price. The freeze-out was subject to the entire fairness standard of review. AT&T bore the burden of proving that the freeze-out was entirely fair to the minority partners. AT&T failed in that proof and thereby sought to capture future value for itself. AT&T did not employ any procedures that insured fairness to the minority partners. The lead partner of the valuation firm had a long-standing relationship with AT&T, and internal AT&T personnel influenced the outcome of the valuation. The court determined the fair value of the interest as a remedy to the situation.