Company News: Injunction upheld against Vonage

For the second time in two days, Internet phone company Vonage Holdings Corp. was hit with bad legal news Wednesday when a federal appeals court upheld a jury verdict and injunction against it for patent infringement.

The company’s shares sank to 96 cents Tuesday, their lowest level since Vonage went public in May 2006.

A Virginia jury had awarded Verizon Communications Corp. $58 million in damages in March plus 5.5 percent royalties on future revenues after finding that Vonage violated three Verizon patents in building its Internet phone system.

The U.S. Court of Appeals for the Federal Circuit, which hears patent cases from around the country, partially upheld the March verdict, directing the trial court to reconsider the verdict on one of the three patents. It also vacated the damages and royalty awards.

“The planned $25 billion buyout of student lender Sallie Mae was thrown into jeopardy Wednesday after the investors said terms of the deal were no longer acceptable.

Sallie Mae, officially SLM Corp., vowed to pursue legal remedies against the investor group led by private-equity firm J.C. Flowers & Co.

The group told Sallie Mae it does not plan to complete the $60-a-share deal negotiated earlier this year, though it is open to discussing new terms.

The investor group has insisted in recent months that new student loan legislation, expected to be signed Thursday by President Bush, could kill the deal. The measure will cut about $20 billion in government subsidies to companies like Sallie Mae that make student loans while halving the interest rate on government-backed student loans.

“The owner of 134 Wendy’s restaurants wants to make a bid for the nation’s No. 3 hamburger chain with two private-equity firms.

David Karam, president of Cedar Enterprises Inc., said Wednesday that he and his partners have been invited by Wendy’s International Inc. to a second round of talks. He is backed by Kelso & Co. and Oak Hill Capital Partners.

“I’ve been involved in the brand,” he said. “I see the great potential of it.”

Cedar Enterprises, based outside Columbus, owns Wendy’s restaurants across the country that have a combined annual revenue of $200 million.

Karam’s first-round proposal was enough to garner entry into a second round next month, where bids are expected. He would not disclose how much he is willing to pay for Wendy’s, but said the company’s current stock price is rich.