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A New York state judge has dismissed a shareholder suit that aimed to block the $72 billion merger between Comcast Corp. and AT&T Corp.’s broadband division. In a two-page opinion filed Wednesday, New York state Supreme Court Justice Helen Freedman found that AT&T Comcast’s proposed governance plan did not violate Pennsylvania law. Though AT&T is incorporated in New York, both Comcast and AT&T Comcast are Pennsylvania companies. Freedman said at an April 8 hearing that she would probably rule for Comcast. The new AT&T Comcast will have one class of 12 directors, none of whom will stand for election until 2005. At that point all of them will be up for election. The plaintiffs, AT&T shareholders Norman Salitz and Michael Grening, argued that Pennsylvania corporate law requires annual election of directors. James Flynn, a partner at Wechsler Harwood Halebian & Feffer in New York, represents the plaintiffs. Flynn had no comment about further plans for the case. Freedman rejected the plaintiffs’ argument. She found that under � 1306 of the Pennsylvania Business Corporation Law, Comcast’s plan is legal. That statute says that the articles of incorporation may permit terms of the directors to be more than one year despite another legal provision mandating the one-year terms. The judge also wasn’t swayed by the plaintiffs’ argument that Comcast’s plan, if allowed, would disenfranchise shareholders of Pennsylvania companies. “If plaintiffs are concerned about the consequences of the statutes,” she wrote, “they should address their concerns to the Pennsylvania legislature or AT&T Comcast’s shareholders, rather than this court.” The companies hope to file their proxy statement with federal regulators by the end of this month. They also plan to have shareholders vote on the deal at the end of June and close the deal in the early fall, said Dennis Hersch, a partner at Davis Polk & Wardwell in New York and Comcast’s lead lawyer on the deal. Davis Polk partners Dennis E. Glazer and Gregory G. Ballard represented Comcast in the litigation. Copyright (c)2002 TDD, LLC. All rights reserved.

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