Lucent Puts Aversano Suit to Rest
The three-sentence statement (see Nina Aversano and Lucent Settle) declares that terms of the settlement between Lucent and Nina Aversano were undisclosed. Aversano is a former North American sales president who complained she was fired for telling ex-CEO Rich McGinn that his sales expectations were unrealistic.
All parties are mum on details of the settlement. But a source familiar with the situation says Aversano dismissed her claims under the New Jersey's so-called "whistleblower" statute. The portion of the case that Lucent and Aversano have settled involved a breach-of-contract claim, in which Aversano said Lucent failed to fork over severance she said was due her after she left the company.
Aversano's suit came alongside the accounting mess that hit Lucent early in 2001, after the board's dismissal of ex-CEO Richard A. McGinn late in 2000 (see McGinn: McGone and McGinn McFound). An error then came to light whereby $125 million in revenue that shouldn't have been booked forced Lucent to restate its earnings (see Lucent Shares Hammered by $125M Goof). Less than two months later, Lucent took another battering when an audit found the problem was bigger than was originally thought, and the company acknowledged an error (see LR Index: Dead in the Water , Lucent Starts Cleaning Up, and SEC Knocking on Lucent's Door).
Lucent has maintained that Aversano was partly responsible for the $125 million error, since an employee fired for booking the transaction worked for her.
The U.S. Securities and Exchange Commission (SEC) has an ongoing investigation into Lucent's accounting, but there's been no update or closure as yet. Lucent, however, says it never received a so-called "Wells notice" of impending civil charges, which was rumored to be on the way back in October (see Lucent on SEC: 'Nothing New').
It's tough to know how the settlement with Aversano worked out without seeing the court papers directly. Lucent won't comment beyond the release. And Aversano, who in December 2001 announced she'd joined the management team of Apogee Networks (see Nina Aversano), has long since departed that post. At press time, it wasn't possible to determine whether she's still on the board of directors of Aplion Networks Inc.
However, Aversano, under the auspices of her own firm, Aversano Consulting LLC, has joined the Supervisory Board of Adva Optical Networks AG.
Lucent is no doubt eager to put the lawsuit behind it as it struggles to regain its footing. Still, there are other matters pending. A particular snag is a class-action complaint filed by Teamsters Local 175 and 505 D&P Pension Trust Fund, headquartered in West Virginia, and the Parnassus Fund and Parnassus Income Trust/Equity Income Fund, based in San Francisco. That case is still pending and Lucent says there's no news to report on its progress.
That lawsuit alleges that McGinn and other execs concealed Lucent's financial status from investors and the public, while manipulating the company's revenue recognition to make sales look more robust than they really were.
— Mary Jander, Senior Editor, Light Reading