Verizon is breathing a sigh of relief after a judge’s ruling that paves the way for a $9.5 billion lawsuit against the company to be dismissed.
Federal Judge A. Joe Fish said yesterday that Idearc Inc., Verizon’s directory business that spun off of the communications giant nearly seven years ago, was solvent. While the case is still active, the judge said it’s likely “that all of the plaintiff’s remaining legal claims will fail,” according to Bloomberg.
Idearc, now dba SuperMedia Inc., claims that Verizon essentially dumped the business, knowing that it was in trouble and saddling it with $9 billion in debt. When filing the lawsuit, Idearc said Verizon “burdened [the company] with an anchor of debt around its neck … and without adequate resources to survive.” Idearc filed for bankruptcy a little more than two years after the spinoff.
Saying the business was “sent into the market to die,” Idearc attorneys pointed to how it was suffering big declines in America’s biggest cities, and that was hidden from investors. But there hasn’t been enough evidence to prove that, the judge noted.
We are gratified that the court found no evidence to sustain the trustees allegations,” stated Verizon spokesman Bill Kula. We look forward to the final resolution of this matter in the near future.”
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