Frontier Communications Corp. Securities Litigation

Court: United States District Court for the District of Connecticut
Case Number: 1:17-cv-1617
Class Period: 04/25/2016 - 10/31/2017
Case Leaders: Katherine M. Sinderson, Jesse L. Jensen
Case Team: Kate Aufses

Lead Plaintiffs Have Settled the Action for $15.5 Million

The Court-appointed lead plaintiffs Arkansas Teacher Retirement System and Carlos Lagomarsino (collectively, “Lead Plaintiffs”), on behalf of themselves and the Settlement Class (as defined below), have reached a settlement of this Action for $15,500,000 in cash that resolves all claims in the Action (the “Settlement”).

On May 10, 2022, the Court held a hearing to consider final approval of the Settlement and related matters.  On May 20, 2022, the Court entered an Order granting Lead Plaintiffs’ motion for final approval of the Settlement and Plan of Allocation and Lead Counsel’s motion for attorneys’ fees and expenses.  On June 29, 2022, the Clerk of the Court entered a Judgment consistent with the Court’s May 20, 2022 Order and closing this case.

If you are a member of the Settlement Class, you are subject to the Settlement and you may be eligible for a payment from the Settlement.  The Settlement Class consists of:

all persons and entities who purchased or otherwise acquired shares of publicly traded common stock and Mandatory Convertible Preferred Stock of Frontier Communications Corporation between April 25, 2016 and October 31, 2017, inclusive (the “Class Period”), and who allegedly damaged thereby.

Excluded from the Settlement Class: (i) Defendants and all Former Defendants; (ii) the Immediate Family Members of any Individual Defendant or any Former Defendant; (iii) any person who was an Officer, director, or partner of Frontier or any Former Defendant during the Class Period and any of their Immediate Family Members; (iv) any parent, subsidiary, or affiliate of Frontier or any Former Defendant; (v) any firm, trust, corporation, or other entity in which any Defendant, any Former Defendant, or any other excluded person or entity has, or had during the Class Period, a controlling interest; and (vi) the legal representatives, agents, affiliates, heirs, successors-in-interest, or assigns of any such excluded persons or entities.  Also excluded from the Settlement Class are who or which excludes themselves by submitting a request for exclusion.

Please read the Notice of (I) Pendency of Class Action and Proposed Settlement; (II) Settlement Hearing; and (III) Motion for an Award of Attorneys' Fees and Litigation Expenses (the “Notice”) to fully understand your rights and options. Copies of the Notice and Proof of Claim and Release Form (the “Claim Form”) are available on the Case Documents section of this page.

You may also visit the Settlement website maintained by the Claims Administrator, www.frontiercommunicationssecuritieslitigation.com, for more information about the Settlement.

Payments to eligible claimants will be made only after the completion of all claims processing.  Please be patient, as this process will take some time to complete.

IMPORTANT DEADLINE:

June 15, 2022

Claim Filing Deadline. Claim Forms must be postmarked (if mailed), or submitted online at www.frontiercommunicationssecuritieslitigation.com, no later than June 15, 2022, to be eligible for a payment from the Settlement.

 

The Litigation

The claims arise from Frontier’s acquisition of millions of customers from Verizon in April 2016, for over $10.5 billion.  Prior to the acquisition, Frontier consistently represented that it was ready to complete the acquisition as planned, and repeatedly told investors after the acquisition had closed that integration had been successful.  Moreover, Frontier represented that the costs to integrate the newly acquired assets would be approximately $450 million.  Contrary to these statements, Frontier knew prior to the acquisition that numerous gaps remained in its integration preparations, and that the cost to properly integrate the newly acquired customers would be far higher. 

When defendants ultimately revealed Frontier’s failure to integrate the customers acquired from Verizon – including unpaid bills, lost customers and nearly $1 billion in integration and capital expenditures related to the acquisition – the price of Frontier securities fell precipitously, wiping out over $2 billion in the value of those investments.

Sections 11 and 12 of the Securities Act hold companies, senior executives and directors, and underwriters liable for false statements contained within offering documents issued in connection with public offerings of securities.  Frontier garnered approximately $2.75 billion through multiple securities offerings during the Class Period, but misrepresented its readiness for the CTF integration in its offering documents.  Likewise, Frontier’s continuing representations concerning the ongoing “success” of its integration progress during the Class Period gives rise to securities fraud claims under Section 10(b) of the Securities Exchange Act. 

On January 18, 2018, Judge Victor A. Bolden of the District Court for the District of Connecticut entered an Order appointing the Arkansas Teacher Retirement System and Carlos Lagomarsino as Lead Plaintiffs and BLB&G as Lead Counsel for the investor class.

Pursuant to the court’s scheduling order, Lead Plaintiffs filed an Amended Complaint on April 30, 2018. Defendants’ motions to dismiss the Complaint were filed on June 29, 2018. Lead Plaintiffs’ filed their opposition to Defendants’ motions to dismiss on August 28, 2018, and Defendants’ filed their reply to Plaintiffs’ opposition on October 12, 2018.

By order dated March 8, 2019, the Court granted Defendants’ motions to dismiss in their entirety, but afforded Plaintiffs the opportunity to move for leave to amend the Consolidated Amended Complaint. On May 10, 2019, Plaintiffs filed their motion for leave to amend the complaint and their Proposed Amended Complaint, which addresses the deficiencies that the Court identified in its ruling. Defendants filed their opposition to our motion for leave to amend on July 15, 2019. Plaintiffs filed their reply in further support of motion to amend on August 12, 2019. On September 29, 2020, the Second Circuit Court of Appeals denied our motion to lift the automatic bankruptcy stay as to the one remaining individual defendant, Frontier's former CEO, Defendant McCarthy. As a result, our appeal remains stayed pending the completion of Frontier's bankruptcy proceedings.