Judge lets suit against Sprint move forward

KANSAS CITY, Mo. -- A lawsuit alleging that Sprint Corp. officials pursued a merger deal with WorldCom for their own financial gain will be allowed to go forward.

Jackson County Circuit Judge Charles Atwell refused Thursday to dismiss the shareholder action brought by Amalgamated Bank of New York, although he expressed misgivings about its merits. Amalgamated is the trustee of labor-related trust and pension funds that own a small fraction of Sprint's outstanding stock.

In the lawsuit, Amalgamated Bank alleged Sprint officials knew regulators would not approve the merger but arranged it to accelerate the vesting of their stock options.

Regulators last year said no to the proposed merger deal between Sprint and WorldCom, saying it would hurt competition.

The defendants named in the lawsuit are Sprint's directors and top officers, WorldCom, and WorldCom Chairman and Chief Executive Bernie Ebbers. Sprint was named as a nominal defendant.

The defendants called the allegations frivolous and moved to dismiss the case.

In letting the case go forward, Atwell said he was following procedural rules requiring him to accept the plaintiff's allegations as true.

"But I think there are some very meritorious defenses" to the lawsuit, Atwell said.

Atwell also took under advisement dismissal motions filed by WorldCom and Ebbers. He said there was little in the complaint suggesting that they had participated in "some civil conspiracy to accelerate these options."

Attorneys for Sprint said the company's board of directors had formed a special litigation committee to review the bank's claims.