Verizon Idearc SuperMedia Stock Fraud Scam discovered. How bankers and executives pad pockets!


Verizon’s Idearc SuperMedia Stock Fraud Exposed

Verizon SuperMedia Stock Scam LogoHere is a link to the Class Action Lawsuit filed against Verizon, JP Morgan etc for SuperMedia/Idearc Stock and Bankruptcy Fraud. Verizon, Idearc’s Executive’s including most of the same Verizon and now current SuperMedia leadership, committed a crime! I was a Verizon employee from 2000 to 2006, then Verizon Yellow Pages became Idearc. It all went downhill from there! Looked at the SEC filings and figured out what Idearc did. They may have gotten away with a perfect crime. I just can’t figure out how a bankruptcy court judge would allow it. But considering the compensation of Idearc’s bankruptcy lawyers in Dallas, and the history with the local federal bankruptcy judge… this looks worse than Bernie Madoff!

How to wipe out shareholders and pad the pockets of bankers, hedgefund managers, and executives 101:

Step 1: Create a public company with two accounts one public and one private.

Step 2: Load all debt to the public account at inception, but report all earnings as one entity, which makes most people believe the debt to asset ratio is okay.

Step 3: Put most of the money into the private account.

Step 4: File for bankruptcy and get rid of the public account.

Step 5: Do it again under a new name.

Very clever, but is it legal? The courts will have to decide. The company had $1.7 billion in assets when it filed for chapter 11 and that money was never factored in during the bankruptcy. On at least 3 separate occassions, Verizon has sold or spun off companies which they themselves overloaded with VERIZON debt. (Fairpoint Communications, Hawaiian Telecom, and Idearc Media) All 3 of these companies filed for bankruptcy resulting in massive losses to anyone who invested their hard earned money trusting the Verizon name. I have always been a strong believer in the “buyer beware” philosophy but Verizon’s hands are certainly NOT clean in all of this. Any individual investor who got caught up in this would be hard pressed to defend Verizon. The entire 2006 earnings is a fraud. Verizon declares $772 million net earnings minus any debt. Verizon then spins off Idearc and takes most of the cash and leaves Idearc with $72 million. Verizon set up two accounts in respect of its whole business: one to hold the cash (the $9 Billion that it borrowed), and one to hold the debt for the borrowing (Spinco). The latter it got rid of, but wrapped up in a pretty package, along about Thanksgiving time, called “Idearc” (vaguely reminiscent of a sort of Noah’s arc of supreme “wisdom”), and garnered with a handsome (though very perishable) dividend. Actually, it was a bomb, expressly timed (in the “tax sharing agreement”) to explode exactly at the two year mark necessary to avoid capital gain tax on the transaction.

Check the most recent income and cash flow statements and you will see that the company is an operating cash cow. But in 2009, I think management wanted the bankruptcy to succeed to get out of paying the debt, so they paid out huge sums to bankruptcy attorneys and for marketing consultants. Now that the bankruptcy is over, management owns shares of new stock and will have an incentive to cut costs and raise the stock price. Paulsen had an obvious incentive to provide a low ball value estimation to get the stock as cheaply as possible.

And then, when it did explode in hands of remote purchasers for value (relying on the Verizon name and integrity), and just as was certainly predictable, Verizon, acting like a total stranger, simply walks away. It might have stopped; it might have looked, and thought of something – thrown a blanket over the victim of its own actions – it could have guaranteed the bonds; taken a preferred issue to pay them off, made a short term loan to help its own telephone book get through the recession – many things…but no. The causal agent of the catastrophe acted just like the driver who hits the pedestrian – 437,000. of them in this case – and just goes on driving down the road….the SEC POLICE nowhere to be seen. It is likely the low point of the American securities system and the New York Stock Exchange. Current participants in this don’t want to tell it. History certainly will.

Just in case you wondered:

Counsel to the Debtors  (Idearc) – Fulbright & Jaworski L.L.P. 2200 Ross Avenue, Suite 2800 Dallas, TX 75201-2784 T: 214-855-8000 F: 214-855-8200 http://www.fulbright.com

Counsel to Unsecured Creditors – Haynes and Boone, LLP 2323 Victory Avenue, Suite 700 Dallas, TX 75219 T: 214-651-5000 F: 214-651-5940 http://www.haynesboone.com

The Debtors’ actual cash balance as of July 31, 2009 was $616 million.

and check this out: http://www.belltelretirees.org/images/stories/docket_29_-_supermedias_motion_to_dismiss_reply_brief.pdf

Latest update: Verizon Sued for Fraud http://www.bloomberg.com/news/2010-09-16/verizon-sued-by-idearc-creditors-claiming-2006-spinoff-led-to-bankruptcy.html

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19 Responses to Verizon Idearc SuperMedia Stock Fraud Scam discovered. How bankers and executives pad pockets!

  1. […] out of the ashes of Idearc’s bankruptcy filings. You can read about how people feel about the SuperMedia scam or my own personal viewpoint on how leadership at SuperMedia seems to dodge brand/reputation […]

  2. Jesse Jinkins says:

    Superpages contacted me months ago. At first I was interested in advertising my company with them but changed my mind when they created a website without my permission. That’s right they actually put up a website without my permission and fraudulently advertised services that I don’t even offer. The information about my company is incorrect. The email address is wrong and the company name is misspelled. They also put up another website on Verizon. There isn’t even any consistency, that information is in error also, they even list a different email address. There have a recording where they claim I made a binding contract with Superpages. That’s is most definately not true. As a matter of fact we never agreed on terms and conditions or even billing. After I have written letters to the company and demanded them to remove their advertising they still refuse to take the websites down. They claim they will cancel billing if you ask but they won’t. Now they are constantly sending me letters where they keep claiming that my Superpages account is seriously delinquent. That is just a scare tactic. I’m not paying a red cent and if they think that I’m foolish enough to pay them anything they are out of their minds. They also contacted me wanting to write me off as a bad debt. I don’t think so. I don’t have any debt with Superpages at all. It looks to me like they are attempting something fraudulent. Well Superpages if you report me to the credit beareau like you are threatening you should know that I’m going to sue. I have copys of the certified letters that I sent. Most importantly you don’t have a contract with me. I have consulted an attorney and I’m not afraid. I know that you are a huge corporation and I’m just the little guy but just give up on me. This is one you won’t win. Jinkins Roofing & Repair

    • Mike Stewart says:

      Jesse, this happens all the time. It is called sales fraud. It helps crony CEOs like Klein get bonuses and crooked sales reps steal commision. Just wait, class action for “RAP” will be forming. In my opinion a good lawyer can contest voice verification. Even medication is enough to warrant a legaleze type discussion.

  3. beentheretoolong says:

    this is common practice jesse – what happens (i am no longer there due to issues like this after an extremely long tenure in the business) is they want to get the billing onto the books asap, so setting up a decent website waits and they put up a generic site to cover themselves to they can bill you – the website group is buried and personnel turn over on a regular basis – …given that you’re a roofer…it was probably packaged into your yellow pages program with a pricing tool called supertool that is a nightmare from a rep and billing perspective — the website will bill way before the normal yellow pages bill cycle and no they won’t let you cancel it as all the billing is tied up together — and if you do cancel it, your yellow page ad cost will skyrocket — this whole operation was created by the ceo in charge now, and was done to create a “happy meal” pricing plan for very complicated products/services/billings which makes it almost impossible to itemize by product unfortunately no one has been able to get thru to him that we are not in fact mcdonalds — it is very deceptive and the decent reps still there (and there aren’t too many of them left) absolutely hate it and try to dodge this “happy meal” selling when they can – unfortunately there is enormous pressure to push all this stuff out so we can look like we have growth online and in direct mail…i believe the company has already been delisted by the BBB and your lawyer might want to consider the attorney general’s office – especially if you didn’t sign anything and your name is being used…for more info you might find enlightening, i’d visit jobvent.com

  4. Hans Spieker says:

    Jesse,

    e-mail the CEO Scott.Klein@supermedia.com. He will make this go away and he has been promising to repair these scenarios…refer to his Superpromise 365. He’s promised to do the right thing because it’s the right thing to do.

    Hans

  5. Rovedoggy says:

    This is a company that really can not be trusted. Yes they do bring some excellent results for some advertisers but for the most part these guys are liars! They talk about call counts and traffic reports all the time and how wonderful they are. Truth is they only show you the ones they want to show you but dont dare show you the majority of the ones that have crappy results. I worked at this stink hole for a few years and at the end before this fat little flip flop wearing homeless looking troll fired me I was seriously hating my life there. I hated my bosses, I hated my desk, I hated my cubicle, I hated that piece of horse chit perfect pitch “a loaf” script they tried to make everyone memorize,,,, what a friggin train wreck that is!!!! I swear if I see those a holes in capes on my tv again Im going to throw the tv out the window, slit my wrists, light myself on fire and jump out the window on top of my tv where if I am lucky there will be a sharp piece of glass from the picture tube sticking up! This company is so desperate! They cannot compete in this google world and they know it. Their stock is so in the chitter it appears it wont be long before they are kicked out of the naz.
    I have heard so many reps lie to customers it was ridiculous! They do say stuff like,, hey, we had 2000 people looking for your type of business last month and we want to help you capture your share of those customers. LIES! I actually had this bag of rat piss call me after I left about a business I started and told me he had 30,000 people in my area looking for my type of business! Im told him he was an efin liar because where I live that would be impossible and I made him put his boss on the phone where he, after much arm twisting finally admitted that he was talking about the whole state not just my specific area! LIES! I even know a guy who works in the San Bernardino office who told me he created his own call count sheets and shows them to customers when hes in the field to get them to buy. I cant confirm this is true but thats what he told me. Really there is no end to the bs with this company. My advice to business owners is spend your advertising dollars elsewhere and run from anything supermedia/ superpages related. Their books, their internet and their mail programs are deceitful in my opinion. And trust me when I tell you this,,,, the first morning I woke up after the troll fired me was one of the happiest days of my life! I truly HATED that place! HATED IT HATED IT HATED IT! And I can tell you that most of the other reps there hate it too! They are just to afraid to leave in a bad economy.

    • Mike Stewart says:

      Mind if I post this on YellowCrooks.com? Guest post?

    • Mike Stewart says:

      Btw, why did you use “Rovedoggy” as a name? Rovedoggy’s posts earlier seem to hint that things are fine at StupidMedia?

      • rovedoggy says:

        That place has been bleeding for a long time & I have hated that place for a long time. My previous rants were simply because I wanted to give you a hard time. I only stayed for the money and that was getting to the point were money wasnt even enough to make me stay at that stinkhole. I made ok money but I watched the majority of the reps starve. Heres the funny thing about Stupidmedia. You get hired, you find out you cant cut it becuase the products and the prices suck. You get all stressed out and the dipchit so called managers start to put the pressure on you. You see the writing on the wall that your probably going to get fired and bam! You go see your doctor and go on disability. Newbies go on disability on a regular basis and so do the reps that have been around along time but cant sale worth a chit. If anyone out there is thinking about working at supermedia, trust me, At&T would be a much better option. I understand they are union and still offer a pension and the pay is great.

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  7. rovedoggy says:

    Just got a c all today from another casualty of the fat homeless troll. This person got fired for what stupormedia called cause and so did another rep for some total bs reason. I wont go into the reason right now but trust me, it was ridiculous! I think I am figuring out the mo of this particular office and this homeless looking flip flop wearing troll manager. Find bullchit reasons to fire people so they can eliminate higher salaries and bring in low level order takers. Another person that is no longer there is a manager that quit recently and though he was worthless as a manager and couldnt sell dick, he was a friend of the big boss and so he got handed a manager position with some of the better sales reps. Rewarded for being a kiss ass! But I was told that he quit because he see’s the writing on the wall for stupormedia and thought it best to get the ef outta dodge. Funny though, this guy was about as worthless as a manager in my opinion and now has a top position with stupormedias competition.

    • Mike Stewart says:

      Denver Painters, how else can they put Google AdWords clicks into projected income without marking them up? The company took your $350 sale and tells the street it was $2350.00! Just be glad you didn’t invest in the company…. I did for 9 years and was royally screwed!

  8. […] Verizon was sued by the Idearc bankruptcy trustee.  This is not the first time an executive from the company has resigned or been fired for […]

  9. rovedoggy says:

    Bye Bye Scotty! Shame others are not following you out the door!

  10. John Doe says:

    I was a recent casualty as a result of Scott leaving so suddonly. SuperMedia has been unable to stop declining revenues all year. I’ve seen the writing on the wall for some time. I would be suprised to see this company stay afloat another 6 months. To have any leadership level position you have to kiss ass and lie for upper management. I wouldn’t do that and was canned because of it.

  11. Sophie's Choice says:

    Wow! I feel at home reading these comments about SuperMedia, the Super Liars with Super lack of integrity, guaranteed! I am in agreement with most of the comments. It was my experience that not only do SuperMedia lie to prospects and customers, the managers lie to the Sales Reps 2. While I was in training, at SM… I was pumped up and ready to roll! Reality hit once I got on the floor and was being told by the managers, “dont say that, say this…” I noticed that the HR ppl sat in some of the sales trainings… and the managers are on their best behavior; however, once they get back on the floor…They just want sales “by any means necessary” (oh, as long as you don’t get caught) Then you are on your own Buddy! I really hated lying to ppl, when I knew there weren’t 12,000 ppl looking for them on SP.com… I had a revelation one day and thought to myself… “OMG! I am turning into a dirty salesperson, who uses deceptive and manipulative devices to get a sales!” In a sales training they said that last year they had over 91,700 cancellations! I wonder why???????? I sat with ppl who complain about Supermedia, but are afraid to leave because of the economy. It was like working in a 3rd world country. I hated going there every morning. I started to question whether the effort was worth it. No… Not for me! So now they have changed their biz directory into a search engine…. That’s a joke! It’s based on relevancy now…. What’s funny is that free biz listing and tier 20 end up at the top of the page over their paying customers! Their scripted response is…”…does it really matter where you show up as long as you get clicks/call right?” OMG! I am still confused after being gone for months!!

  12. YellowCrooks says:

    So, teachers and yellow page retirees get ass raped by corporate executives and hedgefunds because of greed. This is not capitalism… it is crony capitalism at its best.

    Verizon and the companies management team deserve time behind bars, just like the executives of Enron and Countrywide Mortgage.

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