A San Diego law firm has filed for a temporary restraining order to halt any transfer of assets from a proposed sale of Qwest Communications International Inc.’s Qwestdex directory business.
Milberg Weiss, which is suing Qwest over alleged securities violations, seeks an order prohibiting the transfer of any funds arising out of such a sale, or their placement in a constructive trust, officials of the firm said late Monday.
The motion also requests that the U.S. District Court of Colorado put the “hundreds of millios of dollars of insider trading proceeds” obtained by defendents Joseph Nacchio and Phillip Anchultz in a trust, saying they sold their Qwest stock at artificially inflated prices.
According to Milberg Weiss officials, the motion is based, in part, on Qwest’s admission that its financial statements were materially inflated when it bought US West in June 2000 and recent restatements of revenue.
“The motion is completely without merit,” said Qwest Chairman and Chief Executive Richard Notebaert. “We are confident it will be denied. The sale of QwestDex is part of the company’s plans to strengthen its balance sheet and reduce its outstanding debt.
“By trying to stop the sale, or freeze the sales proceeds, Milberg Weiss hurts Qwest’s shareowners, customers, employees and retirees,” added Notebaert. “This motion is contrary to the interests of the shareowners who Milberg Weiss claims to represent.”
Qwest Communications International Inc. provides voice, video and data services to more than 25 million customers. Since its 2000 acquisition of US West, Qwest has been the primary local telephone service provider in 14 Western states, including Arizona.