Covad to Settle Shareholder Suits
Covad Communications Group Inc. agreed to pay $38 million in stock to settle shareholder suits claiming company executives concealed financial problems at the high-speed Web service provider.
Santa Clara, Calif.-based Covad, which said earlier this month that it plans to file for bankruptcy protection, said it will give shareholders and other investors 3.5% of the company’s shares. The agreement values the stock at 61.5 cents a share. An undisclosed cash payment will be made by Covad’s insurers, the company said.
For the record:
12:00 a.m. Aug. 16, 2001 FOR THE RECORD
Los Angeles Times Thursday August 16, 2001 Home Edition Part A Part A Page 2 A2 Desk 2 inches; 46 words Type of Material: Correction
Covad settlement--Covad Communications Group Inc. agreed to pay $3.9 million in stock to settle shareholder suits claiming company executives concealed financial problems at the high-speed Internet service provider. A Bloomberg News brief in Wednesday’s Business section reported an incorrect amount of the settlement.
The settlement “eliminates significant litigation and does not tap into Covad’s cash reserves,” said Dhruv Khanna, a company co-founder and general counsel.
A federal judge in San Francisco still must approve the settlement.
Covad, which trades over the counter, closed unchanged at 60 cents.
