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Business Organizations Keyed to Cox
Bell Atlantic Corp. v. Bolger
Citation:
2 F.3d 1304 (1993)Facts
The Pennsylvania Attorney General sued Bell Atlantic alleging it had defrauded consumers. After some initial skirmishing, Bell Atlantic settled the matter, paying $40 million in customer rebates, making contributions to a consumer education trust, and reimbursing the legal costs of the Attorney General. The plaintiff alleged that the misconduct prompting the state’s successful action was the result of mismanagement and a breach of the directors’ fiduciary duties to the corporation. Bell Atlantic’s board appointed a special litigation committee that opined that the suit was not in the Bell Atlantic’s best interests. The suit was ultimately settled on the eve of the trial; the proposed settlement required Bell Atlantic to establish and follow new procedures to monitor sales and marketing programs and to pay plaintiff’s counsel fees in an amount not to exceed $450,000. Seymour Lazar, a Bell Atlantic shareholder, objected to the settlement.
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