AUSWR
The Association of U S West Retirees
 

 

 

2 KPNQwest bankruptcy trustees sue Qwest
The Associated Press
Denver Post
Wednesday, January 28, 2009

DENVER—Two 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 financial performance.

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.

http://www.denverpost.com/search/ci_11566755