Ivan Seidenberg, the former chairman and chief executive officer of Verizon Communications Inc. (VZ), said the directory unit Verizon spun off that later filed for bankruptcy was healthy and “completely stable.”
Seidenberg, now an advisory partner at Perella Weinberg Partners, testified at a trial today in federal court in Dallas where creditors of the directory business are suing Verizon over the transaction. Verizon wasn’t seeking to unload a dying business, Seidenberg, 65, testified.
“There was no Hail Mary required,” said Seidenberg, who retired from Verizon in December. “This business was completely stable.”
Creditors claim in the lawsuit that New York-based Verizon loaded the business, Idearc Inc., with $9 billion in debt, driving it into bankruptcy. The restructuring of Idearc, now named SuperMedia Inc. (SPMD), created a trust to bring lawsuits on behalf of creditors with claims totaling $6 billion.
The unit was an “extraordinary, capable business” that no longer fit with Verizon’s core operations, Seidenberg said. Although the business was contributing more than $1 billion a year to Verizon, it was not being valued by Verizon investors because it wasn’t growing, he said.
“We were able to stabilize it,” he said. “We could not change it was no longer a growth company.”
The lawsuit is U.S. Bank National Association v. Verizon Communications Inc., 10-01842, U.S. District Court, Northern District of Texas (Dallas).
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