Touch America, Qwest agree on settlement

Qwest Communications International Inc. announced Tuesday that it had settled a dispute with bankrupt Touch America Holdings Inc.

San Francisco Chronicle

Under the terms of the settlement, which still must be approved by a bankruptcy court, Touch America would no longer owe Qwest $59.6 million plus interest that an arbitrator ordered it to pay in March in a dispute over the June 2000 purchase of Qwest assets.

Qwest, meanwhile, will not have to pay $23 million that Touch America said the company owes for the purchase of Touch America’s investment in TW Wireless.

The companies agreed to keep providing services to each other during Touch America’s bankruptcy proceedings to ensure service for customers, and Qwest agreed to buy certain fiber routes from Touch America.

The settlement includes financing for Touch America from Qwest, assuring sufficient cash flow for the company during its bankruptcy proceedings.

The agreement was in the best interests of customers, Qwest and shareholders, said Pat Engels, Qwest executive vice president for the product and pricing group.

Touch America CEO Bob Gannon said the settlement would allow an orderly transition as Touch America winds down its business.

Touch America, based in Butte, Mont., laid off more than half its work force and filed for Chapter 11 bankruptcy protection last week after suffering several financial setbacks since its conversion from the energy giant Montana Power Co. The arbitrator’s decision in March was one of the toughest blows.

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