By Tom Hals

WILMINGTON, Del (Reuters) - A Delaware judge ruled Friday that wireless carrier Clearwire Corp was sold in 2013 for more than twice its fair value, a decision that dealt a stinging loss to the Aurelius Capital Management hedge fund which spent years battling to prove Clearwire was vastly underpriced.

Sprint Corp <S.N> acquired Clearwire in 2013 after a bidding war with Dish Network Corp <DISH.O> pushed the price to $5 per share, valuing Clearwire at about $14 billion.

After Clearwire shareholders approved the deal, an affiliate of Aurelius that had opposed the Sprint acquisition brought what is known as an appraisal action, asking a judge to determine fair value of the stock.

The affiliate had sought $16.08 for each of its 25 million shares, or about $400 million.

Vice Chancellor Travis Laster on Friday sided with Clearwire, which had said the fair price was $2.13 per share, or about $53 million for the fund's stock. Aurelius will also collect interest.

The ruling stands out for a court that rarely finds fair value below deal price, let alone more than 50 percent below.

The decision can be appealed.

A spokesman for Aurelius, which spent years battling Argentina over its defaulted debt, did not immediately respond to a request for comment.

Sprint, controlled by Japan's SoftBank Group Corp <9984.T>, said it was pleased the court recognized Clearwire shareholders received a significant premium.

Wall Street dealmakers have urged Delaware judges and lawmakers to discourage appraisal, which has been become an investment strategy for hedge funds.

Minor Myers, a professor at Brooklyn Law School who studies appraisal, called the ruling unusual.

Typically, each side presents extreme valuations and the judge finds fair value somewhere in the middle. Instead, Laster took Clearwire's valuation and rejected Aurelius's.

"I think it's a message to litigants to be sure the arguments they put in front of the court are reasonable," said Myers.

The court has been criticized by dealmakers for not deferring to the negotiated deal price when a company ran a proper marketing and sale process. Laster found the Clearwire sale was fair to minority investors, but only after Dish intervened and the price was driven to $5 per share.

The Delaware court has ruled in the past year that computer maker Dell Inc and DFC Global Corp, a lender, were both sold below fair value despite properly run mergers.

Those cases are on appeal.





(Reporting by Tom Hals in Wilmington, Delaware; Editing by Noeleen Walder and David Gregorio)