San Mateo v. At Home Corp.

MEMORANDUM *

Appellants, minority shareholders of At Home Corporation (“At Home”), filed shareholder suits in state court against At Home and its controlling shareholders, AT & T Corporation (“AT & T”), Cox Communications, Inc. (“Cox”), and Comcast Corporation (“Comcast”). 1 The minority shareholders challenged the transaction entered into on March 28, 2000 whereby AT & T consolidated its control over At Home by buying out the interests of Cox and Comcast. After At Home filed for Chapter 11 bankruptcy, Appellee Bondholders’ Liquidating Trust, who represented some of At Home’s creditors, asked the bankruptcy court to enjoin the prosecution of these state court actions because the suits were derivative claims that belonged to the estate of At Home. After allowing Appellants an opportunity to amend their complaint to remove the derivative claims, the bankruptcy court ruled that Appellants’ proposed amended complaint still contained precluded derivative claims and, alternatively, that any remaining direct claims were enjoined because they would interfere with the Bondholders’ Liquidating Trust’s pending derivative suit on behalf of the estate against the controlling *668…