Another Lawsuit caused by bankrupt yellow pages company Idearc Media

December 1, 2009

from MarketWire:

Retirees Charge Verizon & Idearc With Illegal Pension Switch

Involuntarily Switched to Financially Challenged Spin-Off Pre-Bankruptcy

DALLAS, TX–(Marketwire – December 1, 2009) – Telephone company retirees have filed a complaint for proposed class action relief under the Employee Retirement Income Security Act (ERISA) charging that they and over two thousand others were involuntarily switched in November 2006, post-retirement, from the financially secure Verizon Communication Inc. (NYSE: VZ) pension plans to pension plans sponsored by a newly spun-off company, Idearc Inc. (PINKSHEETS: IDARQ).

Less than 2 years after Verizon transferred the retirees, Idearc encountered financial problems and began cutting back various earned retiree benefits. These benefit reductions were not experienced by retirees remaining in Verizon’s pension plans. In March 2009, Idearc filed for Chapter 11 bankruptcy.

In mid-November, 2006, after each Plaintiff had been retired for at least ten years, they together with more than 2,000 others were involuntarily reclassified and switched into pension plans run by Idearc. All three Plaintiffs were fully vested in the Verizon pension plans with rights to continued payment of monthly annuities and other Verizon welfare benefits. No party received any Plaintiff’s consent to be switched over to Idearc’s pension plans. From the point of the spin off, concluded on November 17, 2006, Verizon treated the retirees’ rights to the usual Verizon retiree benefits as being terminated.

Plaintiff Philip A. Murphy, former President of CWA Local No. 1301, a resident of Mills, MA, retired from a predecessor of Verizon in 1996. Plaintiff Sandra R. Noe of Ipswich, MA and Plaintiff Claire M. Palmer of West Newton, MA both retired from predecessors of Verizon in 1995 and had for years been participants in Verizon pension plans. None of the Plaintiffs had actually ever worked for Idearc.

When retirees tried to administratively challenge their involuntary transfer to Idearc and its pension plans, without going to court, the respondent companies stonewalled and missed mandated deadlines to respond to the retirees’ internal claims. The retirees’ proposed class-wide administrative claim sought to remedy the mistreatment accorded to both non-management and management retirees who have suffered tremendous losses not suffered by their fellow retirees who were not transferred to Idearc. The respondents refused to treat Plaintiffs’ internal claims as class-wide claims.

Therefore, Plaintiffs filed a proposed class action on November 25, 2009 in the U.S. District Court for the Northern District of Texas, Dallas Division. The Complaint filed in Civil Action No. 3:09-CV-2262 charges pension plan administrators with numerous ERISA violations including:

— Failure to provide requested plan documents;
— Breach of fiduciary duty for refusal to disclose pension related plan information;
— Breach of fiduciary duty for failure to comply with pension plan document rules;
— Various other ERISA violations justifying court ordered declaratory, injunctive and other equitable relief;
— Unlawful refusal to make payment of Verizon pension plan benefits; and
— Unlawful interference with retirees’ rights to receive Verizon retiree pension and welfare benefits.

The Federal Complaint states that when Verizon transferred hundreds of millions of dollars in surplus pension assets to Idearc in November 2006, no pension plan language identified and traced the transferred monies to actual liabilities owed to particular plan participants for the payment of pension benefits. When Verizon conducted the transfer, there were no existing plan terms giving the plan sponsor or any other entity the authority to change the status of the retirees.

“What Verizon did to these retirees is disgraceful,” said C. William Jones, who heads the Association of BellTel Retirees Inc., (www.belltelretirees.org) a retiree activist organization. “They are ducking a fiduciary responsibility to employees who gave decades of service and earned these benefits. These pension funds were set aside over the years for the benefit of employees who worked 20, 30 or more years and earned their pensions over their careers. It is reprehensible to refuse to provide plan documents so retirees can make informed judgments on the state of their pension plan and other benefits which they earned during their working years.”

The Complaint asks that all retirees who were transferred to Idearc be put back into Verizon’s pension and welfare benefit plans. It also asks that Verizon’s and Idearc’s pension plan administrators be order to pay a daily penalty for failure to timely provide requested records. The Complaint is posted at the website for the Association of BellTel Retirees, Inc. See: http://www.belltelretirees.org/index.php?option=com_content&view=article&id=33&Itemid=32

Plaintiffs’ counsel can be contacted at: CurtisLKennedy@aol.com

Almost as bad as employees getting shoved into company stock………………….. Sure they will match it, but as long as the company continues with accounting tricks so Wall Street and Main Street do not know what is really going on with the decline of yellow page usage, you will never see a positive return on the investment. Unless of course you get friends to do some insider trading while hushed during a “Quiet Period”. Someone is laughing all the way to the bank! More to come later folks!


Idearc Execs Sued for Fraud via Dick Larkin at YP Commando

October 13, 2009

Idearc Execs Sued for Fraud

Posted using ShareThis

Short and sweet: Scott Klein said that the company was having issues with collections due to a change from “the phone company” bill to Idearc direct billing. He also stated that they had issues with receivables in 2008 from relaxing the credit policy in 2007 (which I can confirm was something that was not disclosed to investors but only sales consultants.) Klein and his treasurer Dee Jones failed to mention the relaxed credit policies in 2007 after the switch from Verizon billing. This had a direct impact on bad debt. Klein violated securities and exchange rules by not disclosing the relaxed credit policies. The stock dropped 40% after he mentioned the decision he made in 2007 to relax credit policies.

Idearc CEO Scott Klein is not committed to the level of transparency that investors need to make proper decisions on whether investing in Idearc is beneficial to them. I have a feeling that he will not be with the company after a new investor takes over majority share of the company.

The companies executives failure to disclose information to investors does not surprise me. The company fails to discuss issues within the sales organization such as racial discrimination (Spanish Yellow Pages sales commissions in Texas) as well as racial discrimination by Scott Klein’s henchman Jesse Vickers who is black and targets folks that are “white.” It is well-known that these and other issues exist within the sales organization.

I believe that Idearc has a “way-to-heavy” amount middle management people in the way of fixing the company’s customer service issues. When a problem exists, instead of the problem going straight to the person responsible for resolving the issue, the problem is sugar-coated by middle management and the client is left with a bad taste in his/her mouth regarding the way the problem was resolved or lacktherof. Idearc fails to ask the right questions from sales reps and clients. Surveys do not work. Workers feel that survey responses may have a direct impact on employment. The environment in the organization has not been positive since the company has been in the hands of Klein and his cronies.

In my PERSONAL opinion, Scott Klein is just like Obama.  He says what he can to make you think the way he wants you to think, but his policies and acts do not mutually benefit Idearc’s clients, investors, or employees. How many of his announcements and promises made back in the February National Sales Meeting have he actually been successful and made improvements to the company? He is full of crap if you ask me.  The best he can do is create a new gimmick for sales consultants, advertisers, and consumers to be duped into believing is original. Klein copied ServiceMagic.com’s ServiceGuarantee and rebrand it the SuperGuarantee.