July 31, 2007 in Business

Qwest says it will advance money for ex-CEO’s bills

The Spokesman-Review
 

Qwest Communications says it’s settled a dispute with former CEO Joe Nacchio over legal fees stemming from his insider trading conviction.

Qwest Communications International Inc. spokesman Bob Toevs says the Denver-based company will advance reasonable fees and expenses to Nacchio through his sentencing.

Toevs says the company also will pay a limited amount to defense attorney Herbert Stern during Nacchio’s appeal but will not pay fees incurred by Nacchio’s appellate attorney.

In exchange, Nacchio will give Qwest a $6.5 million line of credit to secure advances on the fees. Qwest has not disclosed how much money it has paid Nacchio for his criminal defense.

Nacchio was sentenced to six years in prison Friday for 19 counts of insider trading stemming from stock sales he made while concealing from investors that Qwest faced serious financial risks.

Nacchio also was ordered to forfeit $52 million, the amount earned on the stock sales, within 15 days and to pay a $19 million fine.

•Steelworkers at four Goodyear Tire & Rubber Co. plants have approved a five-year contract, clearing the way for a nearly $1.5 billion sale of much of that business to EPD Inc., an affiliate of Washington, D.C.-based private equity firm Carlyle Group, the union said Monday.

The United Steelworkers said a key issue resolved during the weekend was a Carlyle agreement to form a trust for retiree health care separate from the one at Goodyear.

The deal covers about 1,600 workers at engineered products plants in St. Marys and Marysville in Ohio, Lincoln, Neb., and Sun Prairie, Wis.

The engineered products division has about 6,500 employees in 32 countries who makes hoses, belts and fittings for cars and trucks.

The Pittsburgh-based Steelworkers union said the deal mirrors an existing contract Goodyear worked out with the USW, with minor differences in the pension and health care plans. It calls for $45 million in new capital investments in the four plants.

•Job site operator Monster Worldwide Inc. lowered its full-year sales outlook Monday and said it plans to slash 800 jobs in the wake of swelling legal expenses.

Monster, which has been grappling with an investigation into its stock option grants practices, said second-quarter operating expenses grew by 34 percent, largely because of higher legal fees and severance payments. Profits fell 28 percent in the quarter, even as sales rose.

The layoffs will be made mainly in the North American work force.

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