Qwest Communications International Inc. says it agreed to contribute another $40 million to a previously agreed-to class-action settlement, apparently to cover claims against former chief executive Joe Nacchio and former chief financial officer Robert Woodruff. Nacchio and Woodruff agreed to contribute a total of $5 million from insurance proceeds.
The agreement was reached on Monday, according to a regulatory filing. The settlement by the two former top executives requires court approval.
The plaintiffs alleged, among other things, that the defendants issued false and misleading financial results and made false statements about the company’s business and investments, including materially false statements in certain registration statements.
In September 2006, the federal district court in Colorado approved a proposed Qwest settlement, whereby the company would pay $400 million. However, the settlement excluded Nacchio and Woodruff.
The two executives appealed that order to the U.S. Court of Appeals for the Tenth Circuit, arguing that Qwest was required contractually to indemnify them from civil lawsuits. The Tenth Circuit remanded the case to the district court, with instructions to provide a more detailed explanation for its earlier decision overruling those objections; subsequent to the remand, a proposed settlement was reached involving the claims of the class against Nacchio and Woodruff.
Qwest spokeswoman Diane Reberger told the Associated Press the company is “settling this matter to resolve the risks it presents and allow the prior settlement to go forward without further delay.”
Under the pact, Qwest can terminate the settlement if class members representing more than a specified amount of alleged securities losses elect to opt out of the settlement. None of the parties involved in the settlement admitted any wrongdoing.