Qwest adds millions to settle old lawsuit
By Jeff Smith
Rocky Mountain News
Thursday, August 7, 2008
Qwest Communications has agreed to pay an additional $40 million
to settle a lingering, 7-year-old class-action securities fraud
lawsuit, according to a regulatory filing Wednesday.
Former Qwest CEO Joe Nacchio and former CFO Robert Woodruff
would contribute a total of $5 million out of insurance
proceeds.
The stipulation involving Qwest and Nacchio/Woodruff, which
needs federal court approval, was signed Monday and disclosed in
Qwest's second quarter report with the Securities and Exchange
Commission.
Federal Judge Robert Blackburn approved a $400 million
class-action settlement in the fall of 2006. But Nacchio
and Wood ruff were excluded from the settlement and appealed,
arguing Qwest was required contractually to indemnify them from
civil lawsuits.
In January, a three-judge appellate panel ordered
Blackburn
to more fully explain why he decided it was fair to leave
Nacchio and Woodruff exposed to further litigation.
Qwest spokeswoman Diane Reberger said Wednesday that the telco
is "settling this matter to resolve the risks it presents and
allow the prior settlement to go forward without further delay."
Nelson Phelps, executive director of the Association of U S West
Retirees, said the development is positive, especially coming on
the same day Qwest lowered its financial forecast.
"Anything Qwest can do to reduce future liabilities is a good
thing, and to get anything out of Nacchio and Wood ruff is also
a good thing," Phelps said.
It's unclear, however, whether the reworked proposed $445
million settlement will be approved. Some shareholder
groups previously argued Nacchio and Wood ruff should contribute
personally to a settlement.
Michael Dowd, one of the lead attorneys for the plaintiffs,
didn't immediately respond to an e-mail for comment.
Qwest said in the regulatory filing it has the right to
terminate the agreement if a certain number of plaintiffs opt
out of the settlement.
http://www.rockymountainnews.com/news/2008/aug/07/qwest-adds-millions-to-settle-old-lawsuit/
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