Vonage to stump up $120m to Verizon
Court refuses to reconsider ruling
Vonage has been ordered to pay $120m to Verizon for patent infringements, as the US Court of Appeals rejected its call for the case to be reconsidered.
The final bill was expected to be between $80m and $120m, and Vonage had put aside $88m to cover the cost. The additional $32m is going to hurt, even as the company tries to put a brave face on the result.
"We were not surprised, but disappointed that the court denied our request for a rehearing of the case," a Vonage spokesman told Bloomberg in a statement. "We are pleased to continue putting litigation behind us."
Vonage is also being dragged through the courts by its own shareholders, who are claiming the company's prospectus misrepresented information about the products.
Given that many of those shareholders bought their holding at $17 a share when the company went public back in May 2006, and have seen their investment dive by 87 per cent to the current price of $1.50 a share, one can see how they might be annoyed.
According to Bloomberg, the company might not even be able to pay debt due in December, and will have to try and restructure what it owes in order to stay in business. ®