ATLANTA (AP) ¿ 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.