Senior management at cable company NTL faced another shareholder lawsuit yesterday as the company works out a restructuring plan that will leave its equity investors with heavily diluted stakes. Stull, Stull & Brody joined the ranks of US law firms filing class action suits against the company on behalf of shareholders, alleging that the management misled them.

Class action lawsuits allow a number of parties to club together to seek damages in court, and one recently worked in the favour of the shareholders of another "financially challenged" telecoms group. US phone company McLeodUSA, which emerged from bankruptcy last month, said on Tuesday it had reached a deal with representatives of its shareholders, who had filed suits. The company agreed to distribute an additional 54.8 million shares to holders of the old stock.

As part of NTL's restructuring of $17 billion (€18.7 billion) in debt, the company said it would also have to file for Chapter 11 bankruptcy protection. The New York-based company will then emerge split between its UK and Ireland operations and its continental European assets. Shareholders, however, are not satisfied.