Royal KPN NV (KPN) reached a tentative settlement to end litigation claiming a joint venture between the Dutch phone company and Qwest Communications International Inc. that went bankrupt in 2002 was mismanaged.
KPN, which is partly owned by America Movil SAB, will pay 50 million euros ($68 million) in cash as part of an agreement to resolve a three-year-old civil suit brought by KPNQwest trustees alleging the venture was poorly run, the Hague-based company said in a statement today.
KPNQwest built a 60-city phone and Internet network just before prices for telecommunications services collapsed, pushing it into bankruptcy. The trustees sued KPN, Denver-based Qwest -- which was bought by CenturyLink Inc. in 2011 -- and some former KPNQwest directors, claiming total damages of 2.2 billion euros.
Qwest, which served customers including AOL Inc., Deutsche Telekom AG and Dell Inc. through Europe’s largest fiber-optic network, had to sell the 25,000-kilometer system off in pieces after failing to find a buyer for the whole business. Former Qwest Chief Executive Officer Joseph Nacchio was convicted of insider trading in 2007.
CenturyLink Inc. (CTL:US), the Monroe, Louisiana-based telecommunications company that bought Qwest in 2011 for $24 billion, also agreed to the tentative agreement. The total settlement, if confirmed, would reach 260 million euros, KPN said today.
KPN rose 1.6 percent to 2.48 euros as 10:40 a.m. in Amsterdam, valuing the company at 10.6 billion euros.
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