The Association of U S West Retirees



Nacchio Sues Qwest To Pay for Legal Defense
By Peg Brickley
The Wall Street Journal
Saturday, May 26, 2007

Joseph P. Nacchio, former chairman and chief executive of Qwest Communications International Inc., sued the company he once led to force it to keep paying his legal fees.

Mr. Nacchio has said he will appeal his April 19 conviction, in federal court in Denver, on 19 of 42 counts of insider trading.

The ex-CEO's legal bills are mounting, as he is still on the roster of defendants in "several pending lawsuits and other claims" arising from his stint at the helm of Qwest, according to court papers filed late Thursday.

"Mr. Nacchio faces significant legal exposure by reason of the fact that he was a director and officer of the company," said a letter from Mr. Nacchio's corporate attorney Kevin Abrams of Abrams & Laster in Wilmington, Del.

The letter was sent to Chancellor William B. Chandler, lead judge of Delaware's corporate law tribunal, a court that has seen many such battles regarding legal fees for former executives in trouble.

Former Hollinger International Inc. chief Conrad Black, for example, battled successfully in Delaware to force the company he was accused of looting to pay his lawyers.  Mr. Black is on trial in Chicago, charged with racketeering, tax evasion, obstruction of justice and fraud.

Qwest has been picking up the tab for Mr. Nacchio's lawyers in keeping with standard corporate executive agreements incorporated in his severance package when he resigned in 2002.  Mr. Nacchio says Qwest recently began balking at paying his legal bills, in violation of those agreements.

Mr. Nacchio's attorney Herbert Stern of Stern & Kilcullen LLC said in a court filing that Qwest general counsel Richard Baer didn't return a call he made Thursday afternoon, which Mr. Stern characterized as unusual.

Mr. Stern called Mr. Baer because of a report in the Denver Post.  In the newspaper's account, Qwest Chief Executive Dick Notebaert was quizzed about the possibility that the company would seek to recoup money it had spent defending Mr. Nacchio.

"It's extremely complex," Mr. Notebaert is quoted as saying.

Write to Peg Brickley at