The Association of U S West Retirees



Please Redistribute
August 15, 2006
Mimi Hull, President
AUSWR Board Members and general membership
This update concerns the Brody v. Hellman, Nacchio, et al  (U S WEST Shareholder Dividend) class action filed on behalf of the public stockholders of U S WEST, Inc. against U S WEST’s former directors, Qwest Communications International, Inc., and Joseph P. Nacchio.  The case concerns the nonpayment of U S WEST’s Second Quarter 2000 dividend U S WEST announced it would pay to shareholders of record on June 30, 2000.



In early June 2000, when U S WEST announced plans to pay a Second Quarter 2000 dividend, U S WEST was in the final stages of completing the terms of the merger agreement with Qwest.  Qwest CEO Joseph Nacchio and U S WEST CEO Sol Trujillo exchanged testy letters about the situation.  Mr. Nacchio made it clear that he did not want the dividend paid and he considered the planned dividend payment to be a breach of the merger agreement.  Ultimately, the shareholder dividend was not paid, resulting in a savings of approximately $273 million.  The nonpayment of the U S WEST shareholder dividend resulted in the Brody litigation filed in Denver County District Court.



In June 2005, on the eve of trial of this case, the parties agreed to cancel the trial and enter into a class action settlement agreement.  A Settlement Fund was established in the amount of $50 million -- half paid by U S WEST’s directors' and officers' liability insurance companies, the other half paid by Qwest out of operating revenues.   The Settlement Fund will first be used to pay the expenses of sending out the class notice and claim form, which many of you completed and return mailed to the claims manager in California.  Then, the Settlement Fund is being used to pay attorneys’ fees.  The attorneys requested payment of $15 million in fees, plus approximately $1.3 million for expenses and costs.  When AUSWR and several of organizational leaders learned that the attorney’s were seeking such an exorbitant amount, objections were filed, asking the trial court to award a much more reasonable reduced amount.  You can read the objections and arguments made by AUSWR, Mimi Hull, Eldon Graham and Hazel Floyd at:



Nevertheless, the trial court judge awarded the attorneys the full amount they requested -- $15 million in fees and another $1.3 million for expenses and costs, no questions asked.  You can read a transcript of the arguments made by opposing counsel and the judge's ruling made at the August 30, 2005 public hearing at: 



Since so much of the Settlement Fund is going to the attorneys, leaving less to be shared by all of the claimants, including thousands of U S WEST retirees who were shareholders, AUSWR’s leaders decided to appeal this ruling before the Colorado Court of Appeals.  You can view a copy of the notice of appeal that was timely filed on September 21, 2005 at:   It took the Denver trial court clerk several extra months to get all the papers assembled into a record for the appeal.  AUSWR’s opening appellant brief was filed earlier this month and you can read the facts and arguments at:



During the course of preparing AUSWR's opening appellant brief, a thorough review was conducted of the 5,282 page trial court record.  AUSWR discovered that soon after the decision was made to avoid paying the U S WEST shareholder dividend which would have cost $273 million, an agreement was executed on June 29, 2000 - one day before the merger closed -- to provide U S WEST CEO Solomon D. Trujillo a lucrative severance payout valued in excess of $70 million.  The severance package included $5.5 million for Mr. Trujillo to use to pay any charges for personal use of corporate executive jet services.  For more details, see:



The Settlement Fund obtained in the Brody case has already paid the $15 million fee award, plus costs to the attorneys.  But, it is likely the balance of the Settlement Fund will not be paid out to any claimants until the appeal of the attorney's fee award and other issues are resolved.  If the attorney's fee award is reduced, the attorneys will have to reimburse the Settlement Fund, plus interest.  Meanwhile, the Settlement Fund will continue to accrue interest.  As the Brody case progresses through the one to two year appeals process, updates will be provided at: