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Verizon Agrees to Settle NorthPoint Merger Suit

July 24, 2002|From Bloomberg News

Verizon Communications Inc. has agreed to pay NorthPoint Communications Inc. $175 million to settle a $4-billion lawsuit over their failed merger.

NorthPoint filed suit in November 2000, days after New York-based Verizon scrapped plans to acquire the high-speed Internet provider for an estimated $2.15 billion. San Francisco-based NorthPoint filed for Chapter 11 bankruptcy protection weeks later.

Under the settlement, Verizon will pay NorthPoint $175 million in cash and withdraw a $31.2 million bankruptcy claim, said Lynn Schoenmann, a trustee appointed to manage NorthPoint's remaining business.

A San Francisco jury was scheduled to hear the case starting next week.

An attorney for Verizon said the company settled to avoid the costs involved with a jury trial.

NorthPoint had sought actual and punitive damages of about $4 billion. The defunct Internet company still owes lenders $52 million, bondholders about $400 million and other creditors about $100 million.

The settlement is subject to approval by a bankruptcy judge.

Shares of Verizon fell $1.22 to $27.43 on the New York Stock Exchange. NorthPoint shares rose less than a cent to 23 cents in over-the-counter trading.

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