2 KPNQwest bankruptcy trustees sue Qwest
The Associated Press
Wednesday, January 28, 2009
bankruptcy trustees for Qwest Communications International
Inc.'s Dutch joint venture KPNQwest N.V. filed a lawsuit Tuesday
claiming that fraud and mismanagement by Qwest and three former
executives led to the venture's financial ruin. E.T.
Meijer and Marcel Windt previously filed a similar lawsuit in
New Jersey, where judges ruled the
lawsuit was filed in the wrong jurisdiction. The latest
lawsuit was filed in U.S. District Court in Denver, where Qwest is based.
Qwest had no comment Tuesday on the lawsuit.
The suit alleges Qwest manipulated its financial results to hide
the failure of core elements of its business while it was
creating KPNQwest based on a similar business model.
The lawsuit names Qwest as a defendant along with former CEO
Joseph Nacchio, former Chief Financial Officer Robert Woodruff
and former KPNQwest CEO John McMaster.
Nacchio and other former Qwest executives also are defendants in
a pending civil lawsuit in which the Securities and Exchange
Commission alleges the defendants' actions between 1999 and 2002
allowed Qwest to improperly report revenue to boost Qwest's
Meanwhile, a federal appeals court is reviewing a decision
overturning Nacchio's criminal conviction in 2007 on insider
trading charges. U.S. prosecutors in that case alleged he
sold $52 million worth of stock based on information unknown to
other investors that Qwest revenue was at risk.