Appeals court wants more info on Qwest settlement
DENVER, Jan 16 (Reuters) - A U.S. district judge must explain why he approved a $400 million payout by Qwest Communications International Inc (Q.N) to settle a class-action lawsuit filed by shareholders, a federal appeals court ruled on Wednesday.
A number of shareholder groups -- including several large pension funds -- sued Qwest after the telephone company's stock plummeted in 2001 amid a multibillion dollar accounting scandal.
The shareholders and Qwest had reached the settlement in 2005, but the payouts have been held up since former Chief Executive Joseph Nacchio and former Chief Financial Officer Robert Woodruff appealed the settlement.
Both face civil lawsuits as individuals and argued that their contracts indemnified them from personal lawsuits.
The ruling by the Denver-based U.S. 10th Circuit Court of Appeals does not void the settlement. It asks U.S. District Judge Robert Blackburn, to provide "a more extensive explanation" about why he approved the deal.
"When it comes to page after page of complex legal argument, we need to know what path the district court followed," the appellate court said in its ruling.
Nacchio was convicted last April on 19 counts of insider trading for selling more than $50 million worth of Qwest stock in 2001 after he was told by insiders that the company could not meet its publicly stated revenue goals.
Nacchio was sentenced to six years in prison, fined $19 million and order to forfeit $52 million he made from the stock sales. He is free on bond while his conviction and sentence are under appeal.
(Reporting by Keith Coffman in Denver, editing by Richard Chang)
