The Association of U S West Retirees



Two battle Qwest settlement
The $400 million stockholder pact doesn't resolve accounting claims against former CEO Joe Nacchio and former CFO Robert Woodruff.
By The Associated Press
Denver Post
Friday, March 24, 2006

Two former Qwest executives have asked a federal judge to reject a $400 million proposed settlement of shareholder lawsuits stemming from an accounting scandal, saying it would bar them from seeking indemnification as they work to settle the claims.

Former chief executive Joe Nacchio and former finance chief Robert Woodruff also pointed out in a U.S. District Court brief filed in Denver late Wednesday that they were never invited to participate in settlement talks.

"Not surprisingly, the resulting proposed partial settlement is unfair, unreasonable and inadequate, and would thwart rather than promote the just, speedy and inexpensive determination of this action," attorneys for the two men wrote.

A telephone message seeking comment from the plaintiffs' attorney was not immediately returned Thursday.

Nacchio and Woodruff were among a handful of former executives with Qwest Communications International Inc. accused by shareholders of making false and misleading statements that artificially inflated the company's stock price.

The suits were filed in wake of an accounting scandal that forced the Denver- based phone company to restate billions of dollars in revenue.

The tentative $400 million settlement announced in November would resolve claims against the company, some former executives and its board of directors, but not Nacchio and Woodruff.

In a Feb. 27 brief, plaintiffs' attorneys said the settlement was reached during negotiations over a number of years that included mediation efforts of two judges.

Government officials have said Qwest booked revenue from one-time sales of equipment and fiber-optic swaps while falsely claiming to investors that the income was recurring.

Qwest later restated earnings from 2000 and 2001 to erase about $2.2 billion in revenue.