Pension fund pulls out of settlement with Qwest
By Jeff Smith, Rocky Mountain News
April 6, 2006
A large pension fund has withdrawn from a $400 million class-action shareholder settlement with Qwest Communications, but it's unclear whether any others will follow suit.
"I can confirm that the New York State Teachers' Retirement System did indeed pull out of the class-action lawsuit to which you referred," pension fund spokesman John Cardillo wrote in an e-mail Wednesday. "Beyond that I have no further comment, as it is our policy not to comment on pending litigation."
It's not unusual for shareholders to opt out of a class-action settlement, hoping to independently negotiate a better deal. But a number of large institutional holders already had decided to do that before the tentative settlement on the securities fraud lawsuit was reached late last year.
Qwest spokesman Bob Toevs said the Denver telco doesn't comment on pending litigation.
The proposed settlement was considered to be a major milestone for Qwest. If it holds and is approved, it would resolve the major consolidated shareholder lawsuit against the company for its accounting and investor practices between 1999 and 2002. Since the proposed settlement was announced, however, former Qwest CEO Joe Nacchio has been indicted on 42 insider-trading charges.
Qwest previously settled with the Securities and Exchange Commission for $250 million, and that money also will be distributed to eligible shareholders.
The New York Teachers previously had filed a motion in U.S. District Court in Colorado opposing the $98 million in fees sought by the shareholders' lead law firm, Lerach Coughlin Stoia Geller Rodman & Robbins of California. But it was unclear whether that had any bearing on its decision to pull out of the proposed settlement.
Lerach didn't immediately comment.
A hearing on the settlement and the requested legal fees is scheduled for May 19 in Denver federal court.