The merger between T-Mobile USA and MetroPCS Communications Inc (NYSE:PCS) has stumbled on yet another roadblock, but this time from its own shareholders. MetroPCS shareholders have filed a suit trying to block the deal, terming the merger as “drastically undervalued” and “conflicted”.

In the lawsuit, MetroPCS Communications Inc (NYSE:PCS) shareholders allege the board to be“conflicted and serving its own financial interests” and “PCS’ officers and directors will receive millions of dollars in special payments”. The lawsuit has been filed in Dallas, Texas against MetroPCS, T-Mobile USA, its German parent company Deutsche Telekom AG (FRA:DTE) (PINK:DTEGY) (ETR:DTE), and MetroPCS’ CEO and board of directors.

MetroPCS and T-mobile

“The process leading to the proposed acquisition was tainted by conflicts, tilted towards T-Mobile, and driven entirely by the board and company management, who together control 15.4 percent of PCS’ outstanding stock and seek liquidity for their illiquid holdings,” the shareholder complaint says.

Just a few weeks before, Deutsche Telekom (FRA: DTE) (ETR:DTE) (PINK:DTEGY) , parent company of T-Mobile, struck the merger deal with prepaid regional carrier MetroPCS. As per the terms of the deal, MetroPCS shareholders would get $1.5 billion in cash and a 26 percent stake in the combined company, while Deutsche Telekom would own the remaining 74 percent of the company.

T-Mobile this month said that its merger with MetroPCS was “structured as a recapitalization, in which MetroPCS Communications Inc (NYSE:PCS) will declare a 1 for 2 reverse stock split, make a cash payment of $1.5 billion to its shareholders (approximately $4.09 per share prior to the reverse stock split), and acquire all of T-Mobile’s capital stock by issuing to Deutsche Telekom 74% of MetroPCS’ common stock on a pro forma basis”.

“[Metro]PCS’ officers and directors will receive millions of dollars in special payments — not being made to ordinary shareholders — for currently unvested stock options, performance units, and restricted shares, all of which shall, upon the merger’s closing, become fully vested and exercisable,” the complaint says.

T-Mobile CEO John Legere said during a pre conference call at the time of the merger announcement that the deal will help the company to face bigger competitors like AT&T Inc. (NYSE:T) and Verizon Wireless. This deal is not about simply surviving,” Legere said during a press conference call, and added “It’s about driving growth”.

In a brief, the lawsuit states that the deal has been devised to discourage other bids, so that the merger was guaranteed for Deutsche Telekom AG (FRA:DTE) (PINK:DTEGY) (ETR:DTE). The shareholders are alleging the company is committing corporate waste, gross mismanagement, unjust enrichment, and the alleged breach of fiduciary duty.

The deal still requires approval from the Federal Communications Commission and the U.S. Department of Justice, which could delay the deal until the first half of 2013.