Verizon Communications Inc. is covered for a $95 million settlement in a fraudulent transfer suit by a bankruptcy trustee to claw back $2.3 billion in indirect payments, according to a Delaware Superior Court decision unsealed Wednesday that found the underlying suit was a covered securities claim.
The fraudulent transfer suit was brought by the trustee for then-insolvent FairPoint Communications, which accused Verizon of luring FairPoint into a “disastrous” acquisition of Verizon’s outdated, mostly landline, telephone equipment and infrastructure.
That suit constitutes a securities claim that was “brought derivatively” on behalf of Northern New England Spinco Inc. — an entity Verizon created for delivering its landline assets to FairPoint in a merger — which is a covered organization by the directors and officers policy at issue here, the Delaware court said.
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