Palm ends class action and gives away new Pixi

Palm today cleared the way for the takeover by HP by settling an imminent class action lawsuit that claimed investors had been shortchanged by the deal. The smartphone maker didn't reveal the financial terms of the truce but said it would pay the fees of Steve Ubaney's legal team and wouldn't be held liable. Several other, similar lawsuits may also be underway soon, Palm said in its SEC filing.

Ubaney had argued that Palm had settled for the $1.2 billion deal with HP knowing it could have achieved better results. It didn't acknowledge this in public at the time but later revealed that it had been the target of a five-way bidding war, where it agreed to a lower deal after a higher bidder changed its mind and wanted only patents and a webOS license, either of which would have given Palm little control over its future.

Separately, Palm and AT&T have already cut the price of the Pixi Plus to free on contract. It was launched at $50 just on Sunday. Neither company explained why, but the Sprint and Verizon versions of the phone are already free and would have left AT&T's version struggling among those with a choice of phone providers.

By Electronista Staff