NY Pension Fund Bails Out of Qwest Settlement

April 6, 2006 (PLANSPONSOR.com) - For reasons as yet unclear, the New York State Teachers' Retirement System has pulled out of an already announced $400 million class-action suit settlement with Qwest Communications.

According to the Rocky Mountain News, the New York fund had already filed a motion in US District Court in Colorado opposing the $98 million in fees sought by the shareholders’ lead law firm, Lerach Coughlin Stoia Geller Rodman & Robbins of California. But it was unclear whether that had any bearing on its decision to pull out of the proposed settlement.

“I can confirm that the New York State Teachers’ Retirement System did indeed pull out of the class-action lawsuit to which you referred,” pension fund spokesman John Cardillo wrote in an e-mail sent to the newspaper. “Beyond that I have no further comment, as it is our policy not to comment on pending litigation.”

Qwest spokesman Bob Toevs told the News that the Denver telecommunications firm also does not comment on pending litigation.

If the settlement holds and is approved, it would resolve the major consolidated shareholder lawsuit against the company for its accounting and investor practices between 1999 and 2002. Since the proposed settlement was announced, however, former Qwest CEO Joe Nacchio has been indicted on 42 insider-trading charges.

Qwest previously settled with the Securities and Exchange Commission for $250 million, and that money also will be distributed to eligible shareholders, according to the report.