Vonage in Trouble. Appeal Refused; Verizon Owed $120 Million
Roh, Roh. Vonage is in a small bit of trouble. A US appeals court has refused to revalue their patent dispute against Verizon and agreed that previously decided penalties of $120 million should stand.
Vonage settled the infringement suit on Oct. 25 after Verizon won both a jury verdict and an appeal in the case. The accord left open the amount to be paid until the appeals court decided whether to grant Vonage’s request for reconsideration.
Legal costs have eaten into Vonage’s cash flow and may increase its risk of bankruptcy. The Holmdel, New Jersey-based company said yesterday that it may not have enough money to pay $253.5 million in debt due as early as December 2008. Vonage, which generated cash of $22.5 million in the third quarter, will try to restructure the debt.
Seems like Vonage just can’t get any luck. Thankfully the $120 million settlement ends all patent disputes and should allow the company to proceed without fear of further litigation.
