By PETER HUSSMANN
A judge in Des Moines last week gave lawyers on both sides of the federal class action lawsuit brought in connection with Iowa Telecom's $1.1 billion merger deal with Windstream a victory of sorts in an order relating to motions in the case.
Lawyers for Joseph Haen, one of two Iowa Telecom shareholders who filed class action lawsuits in federal court following the announcement of the merger, plan to seek an injunction delaying the merger. In order to file such a motion, Haen's lawyers argue, information needs to be gathered from Iowa Telecom in regard to the merger discussions.
However, under court rules, that information is not allowed to be sought until a discovery planning conference is held, something that typically takes more than three months.
Lawyers for Haen asked the court to speed up the discovery process by granting a motion to force Iowa Telecom to release certain requested pieces of information and to allow for the depositions of three individuals involved in the merger negotiations.
Specifically, attorneys for the plaintiff are asking for minutes from the meetings attended by any Iowa Telecom board member concerning the merger, all opinions filed by financial advisors in connection with the deal, financial projections for the company, any documents discussing Iowa Telecom's value, any documents pertaining to benefits received by any board member or management member of the Newton, Iowa-based company and the ability to depose the two individuals with the most knowledge of the proposed transaction and the individual with the most knowledge of the financial projections of Iowa Telecom.
Lawyers for Iowa Telecom, its board members and Windstream filed motions in response asking the court to provide a protective order against any discovery and a motion to dismiss the case.
In the order issued Thursday, United States Magistrate Judge Ross A. Walters notes that "ordinarily a court should not wade very far into a case when a motion to dismiss for lack of subject matter jurisdiction is pending."
Although noting Iowa Telecom's motion to dismiss "challenges the authority of the court to hear and decide the case before it," ... "the court will accommodate plaintiff's concern to the extent of requiring defendants to tee up the requested documents for prompt production if and when the motions to dismiss are denied."
Until the motion to dismiss is decided, lawyers for shareholder Haen will not be allowed access to the requested documents. Should the court rule it has the authority to hear the case, Iowa Telecom will be required to release the pertinent documents and proceed with depositions, likely ahead of the ordinary discovery process timeline.