BellSouth-Sprint Battle Heads for Arbitration

Sprint (FON Quote - Cramer on FON - Stock Picks) suffered another setback Monday as its weeklong executive-suite tug-of-war took a new twist.

BellSouth (BLS Quote - Cramer on BLS - Stock Picks) said late Monday that a Georgia judge let stand an injunction preventing its vice chairman, Gary Forsee, from filling the CEO slot at rival Sprint.

Fulton County Superior Court Judge Stephanie Manis said Forsee was bound by terms of a noncompete clause in his contract. The case will be heard in arbitration within the next month, Atlanta-based BellSouth said.

Details of the Sprint-BellSouth fracas emerged last week after Sprint fired its top two executives, William Esrey and Ronald LeMay, over questionable tax shelters the execs used to avoid paying big tax bills on options they exercised during the tech boom. Sprint offered Forsee the job but BellSouth got an injunction that has prevented him from joining Kansas-based Sprint.