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Qwest Seeks to Recoup Former CEO's Legal Fees

July 1, 2010 | Posted in : Defense Fees / Costs, Legal Bills / Legal Costs

Recent stories by the Denver Post and The American Lawyer report that Denver-based Qwest Communications is still trying to reach an agreement with former CEO Joe Nacchio over repayment of legal fees that the company advanced on his behalf before his insider trading conviction in April 2007.  Qwest has recovered the legal fees it paid for Nacchio between the conviction and sentencing in July 2007 and any money doled out to his trial attorney Herb Stern, for the appeal.  Nacchio has agreed to foot the bill of Maureen Mahoney, lead appellate counsel at Latham & Watkins for his appeal case.

According to Qwest’s by-laws, the company is required to advance reasonable attorney fees and expenses to current and former officers who may be involved in any criminal of civil legal proceeding stemming from their employment.  A conviction, if it holds up on appeal, allows the company to recoup those costs.  Qwest continues to cover Nacchio’s legal fees for the ongoing civil fraud lawsuit filed by the SEC and litigation related to the company’s failed joint venture, KPNQwest.  The total legal cost in Nacchio’s defense may be as high as $75 million.