Ruling Requires Sprint Nextel to Cease Owning, Operating, and
Managing the Nextel Network in iPCS Wireless's Territory
SCHAUMBURG, Ill.--(BUSINESS WIRE)--Sept. 24, 2008--iPCS, Inc.
(NASDAQ: IPCS) today announced that the Supreme Court of Illinois has
refused to hear Sprint Nextel's (NYSE: S) appeal of a ruling by the
Appellate Court of Illinois issued in March of 2008. The Appellate
Court ruling unanimously upheld the 2006 ruling of the Circuit Court
of Cook County, Illinois that required Sprint to cease owning,
operating, and managing the Nextel wireless network in iPCS Wireless's
territory.
"We are very pleased with the Supreme Court's ruling. We have
believed from the beginning that Sprint's merger with Nextel and its
operation of the Nextel wireless network in our territory is in
violation of our subsidiaries' management agreements with Sprint,"
commented Timothy Yager, president and chief executive officer of
iPCS. "We continue to be in similar litigation with Sprint related to
its proposed joint venture with Clearwire Corporation (NASDAQ: CLWR)
and we intend to take all necessary steps to defend our exclusivity
rights under the management agreements. We believe that after all of
the evidence is considered in the Clearwire litigation, Sprint will
once again be required to comply with the terms of the deal that
Sprint agreed to when it entered into the management agreements,"
added Mr. Yager.
The Company has been advised by Sprint's attorneys that Sprint has
filed a petition with the Circuit Court of Cook County of Illinois for
relief from that Court's original 2006 judgment. If that is the case,
iPCS Wireless intends to vigorously oppose Sprint's petition. "We
believe this is yet another attempt by Sprint to avoid complying with
the terms of the management agreements that afford iPCS exclusivity in
its territories," concluded Yager.
Sprint/Nextel Litigation Background
On July 15, 2005, the Company's wholly owned subsidiary, iPCS
Wireless, Inc., filed a complaint against Sprint and Sprint PCS in the
Circuit Court of Cook County, Illinois. The complaint alleged, among
other things, that Sprint's conduct following the consummation of the
merger between Sprint and Nextel, would breach Sprint's exclusivity
obligations to iPCS Wireless under its affiliation agreements with
Sprint PCS. On August 14, 2006, the Circuit Court issued its decision
and on September 20, 2006, the Circuit Court issued a final order
effecting its decision. The final order provides that:
- Within 180 days of the date of the final order, Sprint and
those acting in concert with it must cease owning, operating,
and managing the Nextel wireless network in iPCS Wireless's
territory.
- Sprint shall continue to comply with all terms and conditions
of the Forbearance Agreement between the Company and Sprint
setting forth certain limitations on Sprint's operations
following the merger with Nextel.
On September 28, 2006, Sprint appealed the Circuit Court's ruling
to the Appellate Court of Illinois, First Judicial District, and, at
Sprint's request, the effectiveness of the Circuit Court's ruling was
stayed by the Appellate Court pending the appeal. On March 31, 2008,
the Appellate Court unanimously affirmed the 2006 Circuit Court
decision. On May 5, 2008, Sprint filed a petition for leave to appeal
with the Supreme Court of Illinois. Sprint's petition for leave to
appeal was denied on September 24, 2008. On September 23, 2008,
Sprint's attorneys informed the Company that Sprint had also filed a
petition with the Circuit Court for relief from the Circuit Court's
original judgment.
Sprint - Clearwire Litigation Background
On May 7, 2008, Sprint Nextel announced it had agreed to enter
into a transaction among itself, Clearwire Corporation and certain
other parties (the "Sprint-Clearwire Transaction"). The same day,
Sprint Nextel filed a complaint for declaratory judgment against the
Company and certain of its subsidiaries in the Court of Chancery of
the State of Delaware. In that lawsuit, Sprint Nextel seeks a
declaration that the Sprint-Clearwire Transaction would not constitute
a breach of the three separate Sprint affiliation agreements it has
with the Company's subsidiaries.
On May 12, 2008, certain subsidiaries of the Company filed a
lawsuit against Sprint Nextel Corporation and certain of its
affiliates in the Circuit Court of Cook County, Illinois, seeking
declaratory and injunctive relief with respect to the Sprint-Clearwire
Transaction. In that case, the Company's subsidiaries seek a
declaration that the Sprint-Clearwire Transaction, if consummated,
would constitute a breach of the Sprint affiliation agreements between
Sprint Nextel and certain of the Company's subsidiaries, and also seek
an injunction barring Sprint Nextel from consummating the
Sprint-Clearwire Transaction, until the transaction is modified to
comply with the affiliation agreements. The case was stayed pending
certain events in the Delaware litigation initiated by Sprint Nextel.
Sprint Nextel moved to dismiss the Illinois case or, in the
alternative, to continue the stay. The Company's subsidiaries moved to
lift the stay in the case. On September 15, 2008, the Circuit Court
denied Sprint Nextel's motion to dismiss the Illinois case.
On July 14, 2008, the Court of Chancery of the State of Delaware
issued an opinion granting the motion of the Company and its
subsidiaries, dismissing two of the Company's subsidiaries, Horizon
Personal Communications, Inc. and Bright Personal Communications
Services, LLC from the Delaware litigation, and denied the motion to
dismiss iPCS and its subsidiary, iPCS Wireless, Inc. On July 28, 2008,
iPCS Wireless, Inc. filed a counterclaim in the Delaware Court in
which it seeks a declaration that the Sprint-Clearwire Transaction, if
consummated, would constitute a breach of the Sprint affiliation
agreements. The same day, iPCS and iPCS Wireless, Inc. filed a motion
to dismiss the remainder of the case pending before it or, in the
alternative, to transfer the case to the Superior Court of the State
of Delaware. The Delaware Court has not yet ruled on that motion.
About iPCS, Inc.
iPCS, through its operating subsidiaries, is a Sprint PCS
Affiliate of Sprint Nextel with the exclusive right to sell wireless
mobility communications network products and services under the Sprint
brand in 81 markets including markets in Illinois, Michigan,
Pennsylvania, Indiana, Iowa, Ohio and Tennessee. The territory
includes key markets such as Grand Rapids (MI), Fort Wayne (IN),
Tri-Cities (TN), Scranton (PA), Saginaw-Bay City (MI) and Quad Cities
(IA/IL). As of June 30, 2008, iPCS's licensed territory had a total
population of approximately 15.1 million residents, of which its
wireless network covered approximately 12.2 million residents, and
iPCS had approximately 654,000 subscribers. iPCS is headquartered in
Schaumburg, Illinois. For more information, please visit iPCS's
website at www.ipcswirelessinc.com.
"Safe Harbor" Statement under Private Securities Litigation Reform
Act of 1995
Certain statements in this press release that are not historical
facts are "forward-looking statements." Forward-looking statements
generally can be identified by the use of forward-looking terminology
such as "may," "will," "expect," "intend," "estimate," "anticipate,"
"believe" or "continue" or the negative thereof or variations thereon
or similar terminology. The forward looking statements included in
this press release could impact future events or our future financial
condition or performance. These forward-looking statements inherently
involve certain risks and uncertainties, and are based on our current
plans or assessments that are believed to be reasonable as of the date
of this Press Release. Factors that may cause actual events to differ
materially from those contemplated or anticipated in such
forward-looking statements include, among others: appeals, proceedings
or determinations by any judicial body with results or outcomes that
differ from the rulings of the Courts referenced herein; or any other
adverse results in outstanding litigation matters. Investors and
analysts should not place undue reliance on forward-looking
statements. The forward-looking statements in this document speak only
as of the date of the document and iPCS assumes no obligation to
update the forward-looking statements or to update the reasons why
actual results could differ from those contained in the forward
looking statements.
CONTACT: Joele Frank, Wilkinson Brimmer Katcher
Judith Wilkinson / Jamie Moser
212-355-4449
SOURCE: iPCS, Inc.
