Verizon, Vonage Settle Their Differences

Vonage Holdings Corp. and Verizon Communications Inc. on Thursday settled their patent dispute in a move that some analysts predict might keep Vonage out of bankruptcy – for now.

Vonage said its payments to Verizon will be capped at $32 million, in addition to the $88 million already accrued and held in escrow. However, the settlement terms won’t be final until a federal appeals court issues its decision on Vonage’s rehearing petition. Analysts for investment firm Stifel Nicolaus expect the court to deny the hearing. That would trigger a higher settlement number of $117.5 million.

Stifel Nicolaus speculate Vonage will avoid bankruptcy for now. But Vonage isn’t in the clear yet – it recently settled a patent infringement suit with Sprint Nextel Corp. for $80 million and got socked with a third lawsuit last week by AT&T Inc.

Vonage in March lost the patent lawsuit to Verizon.

AT&T Inc. www.att.com
Sprint Nextel Corp. www.sprint.com
Stifel Nicolaus www.stifel.com
Verizon Communications Inc. www.verizon.com
Vonage Holdings Corp. www.vonage.com

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