Robert Bush 6:31 p.m., May 18
Investor Says NextWave Price Too Low
An investor sued NextWave Wireless in Delaware Chancery Court today (Aug. 31), stating that the $600 million that AT&T has agreed to pay for NextWave is too low. According to the suit, the troubled company agreed to sell itself for an initial $1 a share with possible contingent payments. The suing investor, Burt Weiss, says NextWave agreed to the price without conducting an auction or other market check, according to Bloomberg News.
The deal is unfairly designed to "cure the massive debt owed by the company to several of its officers and directors," including senior and subordinated note payoffs, "lucrative severance payments," and vested stock options, Bloomberg reported the suit alleging.
A financial analyst who contributes to this blog has figured that at the time of the AT&T deal, NextWave owed $80 million to "Papa Doug" Manchester, hotelier, Union-Tribune owner, and an original large investor in NextWave. The analyst figured that Manchester rolled over a $50 million preferred stock investment into the $80 million loan. Manchester is believed to have lost heavily on his total NextWave investment.