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July 14, 2009 Forum Report:

Management Refusal to Comply with Information Requirements

 

 

Forum Report: TDS

Management Refusal to Comply with Information Requirements

TDS management responded to the Forum's July 6, 2009 revised information demand last night, a few minutes before the end of the five-day statutory deadline, with another unexplained refusal to comply.[1]  The letter is essentially the same as the initial refusal letter, with only minor variations referring to the revised date and adding a sentence suggesting that the company's senior legal executive had misunderstood the conventional requirement of specifying any basis for claiming the company is not obligated to provide the information.  This is its full text:

Telephone and Data Systems, Inc. has received a letter dated July 6, 2009 from you, purporting to make another demand on the Company pursuant to Section 220 of the Delaware General Corporation Law on behalf of Leonard Rosenthal. We do not believe that the demand complies with the statute's requirements, including, without limitation, the requirements as to the form and manner of making a demand and for a proper purpose. Accordingly, the Company declines to permit the requested inspection. Further, it is neither required nor appropriate for TDS to provide advice to you about these matters, which are legal in nature.

Accepting management's stated concern about providing legal advice as honest confusion rather than deliberate evasion, I replied last night with a clarification of the need to "state your position with sufficient particularity for me to understand it," and asked that they do so by the end of this week.[2]

Please let me know if you have any questions or comments.

GL – July 14, 2009

 

Gary Lutin

Lutin & Company

575 Madison Avenue, 10th Floor

New York, New York 10022

Tel: 212-605-0335

Email: gl@shareholderforum.com

 

 

 

This Forum program is open to all shareholders of Telephone and Data Systems, Inc. (NYSE: TDS), and its controlled subsidiary, United States Cellular Corporation (NYSE: USM), and to any fiduciaries or professionals concerned with their investment decisions. Participation is free of charge, according to the Forum's standard Conditions of Participation.

The purpose of the Forum is to provide shareholders with access to information and a free exchange of views relating to their consideration of issues described in the Forum Summary. As stated in the Conditions, all Forum participants are expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants. Forum polices are intended to support anonymous communication, and provide that participants will not be identified or quoted without their explicit permission.

The initiation of this program was supported by Southeastern Asset Management, Inc., which as manager of the Longleaf Partners Funds and other client funds is the largest TDS shareholder with common and special common stock aggregating more than 15% of the total of all classes outstanding. TDS has been invited to assume corporate responsibility for the costs of addressing issues of apparent significance to a broad range of its investors, according to the Forum's Conditions, and other participants may be invited to contribute support to the continuing program pending the company's acceptance of responsibility.

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