Qwest’s legal hell


Qwest it seems is stuck in a legal quicksand. In February 2004, the company decided to make corporate oversight changes, and settle "several so-called derivative suits charging that current and former officers and directors had breached their duties and engaged in self-dealing according to Rocky Mountain News.

A derivative suit is one in which a shareholder essentially sues on the company’s behalf.The proposed settlement also called for $25 million to be paid to Qwest from an insurance fund designed to defend the telco from lawsuits.

Folks like Phil Anschutz and Joe Nacchio were implicated in this lawsuit. Having made more than $2 billion from stock sales, it was clear that the big guns were not really paying the price, but instead it was the current shareholders who were left holding the bad. (What’s new?) This has pissed off some US West retirees who have filed a lawsuit against Qwest saying the settlement amounts to a “scam” at the expense of thousands of shareholders.

Although the securities fraud allegedly perpetrated by certain named defendants is one of the largest in history, the settlement obtained does not require any of the defendants to pay even a single dollar, the filing states.

Complete Story from Rocky Mountain News.

Comments are closed.