Please Redistribute
August 18, 2005
Mimi Hull, President 
Board Members and General members
This update concerns the many securities lawsuits pending against Qwest.  As you know from reading my last report dated April 21, 2005, there are two primary groups of securities cases pending -- federal court cases and state court cases.  All federal case have been consolidated into Denver Federal Court and are assigned to Federal Judge Robert E. Blackburn and Magistrate Judge Craig B. Shaffer.  The state court cases, namely lawsuits by CalSTRS, the State of Illinois, the State of New Jersey and Louisiana Teachers, are pending in different state courts.
Essentially, all shareholder cases argue and claim in common that between May 24, 1999 and February 14, 2002, certain officers and directors of Qwest engaged in a massive scheme to inflate the company's reported revenues and earnings in an effort to pump up the price of Qwest stock.  The shareholder plaintiffs contend that as the Qwest's officers' and directors' fraudulent misrepresentations pushed up Qwest's stock price, Qwest directors and officers reaped many millions of dollars from illicit insider trading and used inflated Qwest shares as currency to buy U S WEST.
The parties had been conducting depositions.  A month ago, on July 15, a "Status Report" was filed and, as of that date, 36 depositions had been conducted.  Also, the parties reported that many key persons had not yet been deposed, because the United States Attorney's Office had requested the depositions of 15 person be deferred, including three defendants in these actions:  Robin Szeliga, James A. Smith and Drake Tempest.  The parties were planning for the following key witnesses to be deposed according to this schedule:  08/23/05  Philip Anschutz;  09/12/05  Craig Slater;  09/14/05  Robert Woodruff; and  09/15/05  Joe Nacchio.
On August 3, 2005, the United States Attorney's office filed a special appearance in the consolidated shareholder cases and formally requested a court order to postpone depositions, arguing that the discovery process could interfere with criminal proceedings.  Acting U.S. Attorney William Leone told the court he doesn't want certain sensitive information from key witnesses being disclosed prematurely in these civil cases.   
Although the attorneys for the lead plaintiffs vehemently opposed the U.S. Attorney's request that the deposition process come to a halt, yesterday, Magistrate Judge Craig Shaffer issued a ruling that partially granted the U.S. Attorney's request.  For at least until September 30, depositions that were scheduled for key witnesses, including former Qwest CEO Joseph Nacchio, will not take place.  Also, the U.S. Attorney's office has the option of going back to the court on September 12 to ask for a further delay of discovery and depositions.
To date, none of the attorneys or litigants have filed anything in the court file saying anything about the progress of the ongoing settlement discussions.