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Sprint Accused of Concealing Class Actions

WHITE PLAINS, N.Y. (CN) - Sprint sold $2.3 billion worth of delinquent wireless accounts without telling the buyer that some of the accounts were the subject of class action lawsuits, the buyer claims in Westchester County Court.

Cavalry SPV says that between December 2003 and May 2008, it bought eight portfolios of "charged-off consumer wireless phone debt from Sprint," worth $2.3 billion.

When Sprint customers fail to pay their bills, the company cancels the accounts and charges an early termination fee.

Four months before Cavalry paid $87 million for the first portfolio, California consumers brought a class action against Sprint, alleging that its early termination fees were unfair, according to the complaint.

Delaware-based Cavalry says that while it was acquiring the remaining seven portfolios, a class of Illinois consumers and a nationwide class also sued Sprint over the same issue.

Sprint is appealing the December 2008 California ruling, which found that its early termination fees were invalid, according to the complaint.

Cavalry claims Sprint waited more than 5 years to notify it about the California lawsuit. Sprint never notified Cavalry about the Illinois or the nationwide class actions, according to the complaint.

Cavalry sued Sprint Spectrum and 21 subsidiaries for breach of warranty. It is represented by Eric Mayer with Susman Godfrey of Houston.

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