From Deseret News archives:
Qwest, Nacchio settle legal fee dispute
Qwest, which had been required under its bylaws to pick up the legal tab, will pay bills incurred through the day Nacchio was sentenced and a portion of lead defense attorney Herbert Stern's bills during his appeal, but it will not pay for Nacchio's appellate attorneys.
In exchange, Nacchio will give Qwest a $6.5 million letter of credit to secure advances Qwest pays, company spokesman Bob Toevs said.
Nacchio was sentenced to six years in prison and $71 million in fines and forfeitures Friday after he was convicted in April of 19 counts of insider trading for selling stock when he knew Qwest faced financial risk but concealed the problems from investors.
Nacchio, 58, was denied bail during his appeal and is expected to begin his prison term within two months.
The agreement announced Monday stemmed from a lawsuit Nacchio filed in May, asking a federal judge to order Qwest to continue paying legal fees during the appeal process.
"Any disputes concerning these matters have been postponed and reserved for the conclusion of the appeal in the criminal matter," Stern said in an interview.
Qwest will continue paying legal fees for the civil action, Toevs said.
The criminal and civil cases arose from a federal investigation into a multibillion-dollar accounting scandal that rocked Qwest, a primary telephone service provider in 14 mostly Western states, including Utah.
The Securities and Exchange Commission has said the company falsely reported fiber-optic network capacity sales as recurring instead of one-time revenue between April 1999 and March 2002. They said the practice allowed Qwest to improperly report about $3 billion in revenue and helped it acquire former Baby Bell US WEST Inc.
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