Anschutz May Pay $4.4 Million in Suit
Philip Anschutz, billionaire financier and L.A. sports mogul, is willing to pay $4.4 million to settle charges that he made millions of dollars at the expense of Qwest Communications International Inc. shareholders, sources close to the matter said Friday.
Anschutz is one of five telecom executives accused of profiting from initial public stock offerings without disclosing conflicts of interest. A lawsuit filed in September by New York Atty. Gen. Eliot Spitzer demands $4.8 million in IPO profits from Anschutz, the founder and former chairman of Qwest.
Anschutz, 63, of Denver, is not expected to admit guilt, and the proposed settlement stipulates that his $4.4-million payment will go to charity, according to a source who spoke on condition of anonymity.
If wrapped up as proposed next week, the deal would set a precedent, putting pressure on the other defendants to open their own settlement negotiations with Spitzer.
Anschutz spokesman Jim Monaghan declined to comment. Qwest spokesman Chris Hardman also declined, saying the company is not a party to the lawsuit. Spitzer spokesman Darren Dopp cautioned that no settlement had been finalized.
“We’re hopeful for a resolution, but it’s not done yet,” Dopp said.
The other defendants in Spitzer’s suit are former Qwest Chief Executive Joseph Nacchio, former WorldCom Inc. CEO Bernard Ebbers, Micromedia Fiber Networks Chairman Stephen Garofalo and former McLeod USA CEO Clark McLeod.
Spitzer sued the five in September, contending that they “reaped enormous personal profits” from sought-after IPOs while steering investment banking business to Citigroup Inc. In addition to seeking repayment of $28 million in profits from the IPOs, the lawsuit demands the $1.5 billion they made by selling their shares in their companies.
Although the suit focuses on telecom firms once hyped by Jack Grubman, a star analyst at Citigroup’s Salomon Smith Barney investment bank, Anschutz’s ventures range across several industries. In Los Angeles, he is best known as the owner of the L.A. Kings and part owner of the L.A. Lakers and Staples Center.
His Regal Entertainment Group merged the once-bankrupt cinema operators Regal Cinemas, Edwards Theatres Inc. and United Artists Theatre Co. into a national chain that raised $342 million last May in an IPO.
And Anschutz still owns 18% of Denver-based Qwest and holds stakes in numerous smaller telecom equipment companies, software firms and other ventures.
Total net worth: $4.3 billion, according to a Forbes magazine tally last fall.
“It’d be foolish for Anschutz to pass up the opportunity to get Spitzer off his back for the amount of money at issue,” Christopher Bebel, a former federal prosecutor now with Shepherd Smith & Bebel in Houston, told Bloomberg News.
