An old bankruptcy case is coming back to hit
right in the wallet.
The Philadelphia-based cable system operator said Tuesday that a legal settlement would slash first-quarter earnings by more than half. And the damage may not be done yet.
Comcast said it would pay
$170 million to cover its share of the phone giant's settlement of some lawsuits tied to the At Home bankruptcy.
At Home, a now-defunct high-speed Internet service, operated as Excite@Home until its effective demise in 2001. Comcast and AT&T, former shareholders in At Home, were named in a class action suit claiming intellectual property and disclosure infractions.
Comcast said the charge would slash its
first-quarter earnings, reported last week at $313 million, or 14 cents a share, to $143 million, or 6 cents a share.
The news came as the Excite@Home Bondholders' Liquidating Trust settled with former owner AT&T for $400 million. The settlement consists of a $340 million payment from AT&T and the release of $60 million in reserves established for the benefit of AT&T in the Excite@Home bankruptcy. Under its 2002 acquisition of AT&T Broadband from AT&T, Comcast is contractually liable for 50% of the settlement amount.
Excite@Home bondholders said Tuesday that their suits against Comcast and closely held Cox Communications continue. Comcast said a lawsuit filed in federal Bankruptcy Court against AT&T, AT&T Broadband and others seeking to recover alleged "preference" payments will be dismissed. A spokeswoman didn't immediately return a call seeking further comment.
In September 2003, a federal judge
refused to dismiss a class-action suit alleging securities fraud by Excite@Home's former owners.
At issue in the case is the technology developed by At Home to deliver high-speed Internet to households via cable systems -- technology that AT&T unfairly expropriated, according to the suit.
Late Tuesday, Comcast fell 18 cents to $31.99