By Jeff Smith
Rocky Mountain News
Friday, December 29, 2006
A Dutch court wants to investigate whether KPNQwest, a joint
venture of Royal KPN and Qwest Communications, misled
investors before spiraling into bankruptcy in 2002. The
Amsterdam-based Enterprise Court suggested that could have
been the case in a ruling to probe the events surrounding
the venture's precipitous decline, Reuters reported this
"The Enterprise Court . . . cannot rule out that KPNQwest
published misleading results in 2001," the court documents
At its peak, KPNQwest owned and operated a fiber-optic
communications network that connected 60 European cities.
Qwest earlier this year settled a KPNQwest shareholder
class-action lawsuit for $11 million.
But the Dutch court investigation, depending on the outcome,
could affect other litigation involving Qwest's handling of
its failed European fiber-optic venture.
Last fall, Cargill Financial Markets and Citibank filed a
$278 million lawsuit in the Netherlands against Qwest and
some of its former executives, including former CEO Joe
Nacchio, in connection with KPNQwest.
At least two other lawsuits are pending against Qwest
related to the European communications network venture,
according to regulatory filings.
Dutch bankruptcy trustees alleged Qwest and Nacchio used
KPNQwest as a vehicle to artificially prop up the Denver
telco's stock price and eventually bled KPNQwest of its
Nacchio's attorney in 2004 called the allegations baseless.
Qwest doesn't comment about pending litigation.