Opinion ID: 628604
Heading Depth: 2
Heading Rank: 1

Heading: Bell of Pennsylvania Matter

Text: 4 This lawsuit stems from the April 1990 settlement of consumer fraud claims brought by the Pennsylvania Attorney General and the Pennsylvania Office of the Consumer Advocate against one of Bell Atlantic's subsidiaries, Bell of Pennsylvania. 2 Settlement of the Bell of Pennsylvania matter required Bell Atlantic to pay over $40 million in refunds to customers, contributions to a consumer education trust, and legal costs to the Attorney General. 5 Two groups of shareholder attorneys responded to the announcement of the settlement. The first group, representing shareholder Lazar, brought a derivative action in state court against nominal defendant Bell Atlantic and certain of its officers and inside directors, charging defendants with mismanagement and breach of fiduciary duty. The Lazar suit sought to recover, on behalf of nominal defendant Bell Atlantic, amounts lost due to the alleged misconduct of Bell Atlantic directors and officers. 6 The second group of shareholder attorneys, representing the plaintiffs in this action, Martha Taub and the Trustees under the will of Beatrice Wilding, made a demand on Bell Atlantic's board to seek recovery from those responsible for the Bell of Pennsylvania matter. In response, Bell Atlantic's board created a special committee that investigated the allegations with independent counsel. Following the investigation, Bell Atlantic's board accepted the committee's recommendation to reject the demand as not in the company's best interests.