Update - Sept. 26, 2011: U.S. District Judge Timothy S. Black on Monday denied the plaintiffs’ motion for a preliminary injunction to block Cincinnati Bell Inc from implementing a 2010 plan to spend $8.5 million on executive pay raises.The Federal Judge said that investors could not prove they would suffer irreparable harm otherwise and therefore denied the request to divert the executives’ compensation to a constructive, interest-bearing trust.

Case Summary: An investor in shares of Cincinnati Bell Inc. (NYSE: CBB) filed a lawsuit against directors of Cincinnati Bell alleging possible breaches of fiduciary duties by agreeing to large increases in executive compensation despite weak financial results in 2010.

According to the complaint the plaintiff alleges that directors breached their fiduciary duties to shareholders by violating its own pay-for-performance policy. The plaintiff claims that despite Cincinnati Bell’s Net Income declined $61.3 million and a negative 18.8% annual shareholder return Cincinnati Bell executives' salaries increased between 54% and 80%. In fact, Cincinnati Bell’s CEO pay rose from about $4.985million in 09 to $8.52million in 2010 and its CFO’s compensation increased from roughly $1.15million in 2009 to $2.074million in 2010.

Recently, Cincinnati Bell’s shareholders expressed their disdain for executive pay packages by voting “no” on Cincinnati Bell's say on pay provision. Cincinnati Bell Inc. received almost 70% opposition against its pay practices at its May 3 annual meeting, according to a company filing. The roughly 30% support are one of the lowest vote seen so far this season. Shares of Cincinnati Bell Inc. (NYSE:CBB) rose from as low as $1.39 per share in Jan 09 to $3.54 per share in June 2010. However, NYSE: CBB stocks had fallen before from as high as $4.69 in April 08, respectively $6 in 2007. Additionally, NYSE CBB stocks traded recently under $3, thus under 50% of its highest value in 2007.