Creditors of a former Verizon subsidiary, Idearc Inc., are taking the phone company to trial nearly three years after Idearc filed for Chapter 11 bankruptcy.
Idearc, now known as SuperMedia Inc., spun off from the telecommunications giant in 2006, but was bankrupt by March 2009 and didn't emerge from Chapter 11 until almost a year later. Creditors, who are asking for $9.5 billion, says Verizon knew that Idearc's directory business was in trouble, but went ahead and spun it off, saddling it with $9 billion in debt, Bloomberg Businessweek reported.
Attorneys for Idearc say Verizon "burdened [the company] with an anchor of debt around its neck ... and without adequate resources to survive." A Verizon spokesperson told Bloomberg that the lawsuit is "baseless and without merit." The carrier has tried several times to get the suit tossed out, but to no avail.
The trial is getting underway today in Dallas. It's a bench trial, meaning there is no jury — the judge will make the final decision on the case.