Lucent Puts Aversano Suit to Rest

Lucent Technologies Inc. (NYSE: LU) today announced closure on a longstanding lawsuit that originally was set for trial early this month.

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
jgh 12/5/2012 | 12:56:42 AM
re: Lucent Puts Aversano Suit to Rest Looked up the info on Nina Aversano and to call her a whistle blower does a disservice to those people who risk their careers detailing the illegal activites at their companies.
Ms. Aversano was fired because she didn't make her numbers, how many people did she fire under the same circumstances. Then she has the nerve to accuse Lucent, aka Rich McGinn, of illegal activities was aresult of her dismissal. There are no heroes at the Lucent debacle and that includes the "heroic" Aversano.
BTW, her post Lucent career hasn't been too successful, dismissed by Apogee and on the Board Of Directors of the failed Aplion Networks.
Indicative of her business acumen.
jj388 12/5/2012 | 12:56:39 AM
re: Lucent Puts Aversano Suit to Rest Back in the day, we "affectionately" referred to Aversano as "grandma." She had that kind of "your my kids" way of talking to the sales force. Kind of Sales VP as Student Guidance Counselor.

Hated it then, hate it now.

beesharp 12/5/2012 | 12:56:24 AM
re: Lucent Puts Aversano Suit to Rest I was amazed to see that this person had attempted to position at herself as a whistleblower. What she did was manipulate the numbers and now she's trying to manipulate the law to her advantage. These people have absolutely no srcuples. Its all a big game to them.
BobbyMax 12/5/2012 | 12:55:27 AM
re: Lucent Puts Aversano Suit to Rest Lucent made so many tactical, business and technical mistakes that its future is totally obscure now. It has no where to go. With large workforce, 36,000 workers, it has not been able to craft a market for itself. It has given up on its flagship products.

Lucent has not been able to dedicate more resources to to sales and marketing efforts. It has not been able to achieve a balance in its workforce.

Mrs. Ruso and Mr. Schact are still hanging around with large bonuses that they do not deserve. Neith of these people have ant experience in the telecom business. Mr. Schact made his entry through a back door. All these things brought down Lucent. The Lucent Board does not take any interest in Lucent althogh it enjoys all the benefits without rendering any service to the company.

The story involving Mrs. Aversano is of no significance, considering its inability to do any thing.

Very sad indeed!
wblower 12/5/2012 | 12:55:06 AM
re: Lucent Puts Aversano Suit to Rest Well: look who is in charge?
Pat Russo: basket weaving major with honor and the old ATT baby sitting school
Wireless: no leadership there (J. Davidson: I don’t know if she can lead herself)
Franky for ONG: No Education University (NEU) graduate, not even a HS diploma.
Billy Oshea for Bell Labs: history major (BA) and a big screw up, of course with the help of all the worst decision makers (Rod: the deep optical whole who knows nothing about optics, jeffy boy: the software with many bugs, Davy B. the other Mems poster boy) just to name a few.
Only God knows how many opportunities and products these individuals screw up
The sad story these entire dysfunctional managers are still in charges for additional screwing.
Mad Max 12/5/2012 | 12:55:04 AM
re: Lucent Puts Aversano Suit to Rest OK Lucent (NORTEL, etc.) boys and girls...it's time to get out of your PJ's, take a shower, LET GO of the past...move on ...get a job!

Not to mention that you should consider that you (or I) have ABSOLUTLY no clue as to what happened to Aversano.

Mad Max 12/5/2012 | 12:55:04 AM
re: Lucent Puts Aversano Suit to Rest OK Lucnet (NORTEL, etc.) boysa nd girls...it's time to get out of your PJ's, take a shower, LET GO of the past...move on ...get a job!

Not to mention that you should consider that you (or I) have ABSOLUTLY no clue as to what happened to Aversano.

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