Cbeyond gets preliminary approval to settle derivative lawsuit
By APFriday, October 23, 2009
Cbeyond gets preliminary approval to settle suit
ATLANTA — Communications services company Cbeyond Inc. said Friday that the Superior Court of Fulton County, Ga., issued preliminary approval for the settlement of a derivative lawsuit that the company had previously disclosed.
A derivative lawsuit lets shareholders sue executives or board members over claims that their actions harmed the company as a whole.
The suit had alleged that individual defendants caused Cbeyond to issue “materially false or misleading statement and omissions concerning the company’s financial well-being and future prospects” between November 2007 and February 2008.
It alleged that the defendants “failed to disclose and/or purposely misled investors regarding Cbeyond’s customer attrition rate … which was allegedly much higher than disclosed by the company through the individual defendants.”
Cbeyond said Friday that the settlement includes payment of $200,000 in plaintiffs’ counsel’s fees and expenses. The money will come from a company insurance policy and won’t hurt Cbeyond’s financial statements.
Cbeyond said the settlement still needs final approval from the court.
