Qwest Communications (Q) second quarter report filed with the Securities and Exchange Commission reveals that Qwest has agreed to pay an additional $40 million to settle a lingering securities class action lawsuit. Under the revised terms, which still need approval by the federal court, former Qwest CEO Joe Nacchio and former CFO Robert Woodruff would also contribute a total of $5 million out of insurance proceeds.
According to the Rocky Mountain News, federal Judge Robert Blackburn approved a $400 million class-action settlement in the fall of 2006, but Nacchio and Woodruff were excluded from the settlement. The two men appealed, arguing Qwest was required contractually to indemnify them from civil lawsuits, and in January, an appellate court ordered Blackburn to more fully explain why he decided it was fair to leave Nacchio and Woodruff exposed to further litigation. The article also notes that it is unclear whether the proposed $445 million settlement will be approved as some shareholder groups previously argued Nacchio and Woodruff should contribute personally to a settlement.
