IPCS Units File Suit Vs Sprint, Nextel Communications"

WASHINGTON -(Dow Jones)- IPCS Inc. (IPCX) disclosed Monday that its Horizon Personal Communications and Bright Personal Communications Services units filed a lawsuit against Sprint Corp. (FON) and Nextel Communications Inc. (NXTL) alleging that their pending merger will violate certain exclusivity obligations.

The company said in a document filed with the Securities and Exchange Commission that its units are trying to prevent an imminent breach of contract that would destroy their business.

Horizon and Bright Personal Communications seek to protect exclusivity rights that they bargained for and received under long-term written contracts with Sprint.

At Sprint's direction, the units said they invested hundreds of millions of dollars to expand Sprint's wireless communications network in their respective exclusive territories, and they have financed, owned, operated and managed the network for Sprint in those territories.

Horizon and Bright Personal Communications said they made this "enormous investment in reliance on a promise by Sprint that it would not compete" against them in those territories.

According to the filing, Sprint promised the units that they would be the sole and exclusive manager and operator for "Sprint PCS" in an exclusive territory called a "service area".

Further, Horizon and Bright Personal Communications claim that Sprint agreed that neither it nor its related entities would own or operate another wireless network operating in the same spectrum used by the units and Sprint PCS.

Now, the units claim, despite clear contractual obligations, Sprint plans to acquire through a merger one of their most significant competitors, Nextel.

The lawsuit - filed in the Court of Chancery of the State of Delaware, New Castle County - seeks, among other things, a temporary restraining order, a preliminary injunction and a permanent injunction enjoining Sprint and its related entities from engaging in certain post-closing conduct that would violate the management agreements.

-By Chad Clinton, Dow Jones Newswires; 202-862-1349; chad.clinton@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 25th July 2005