DSL provider NorthPoint Communications Friday filed a lawsuit against Verizon, just over one week after Verizon terminated an agreement that would have merged the two companies' DSL businesses.
The goal of the lawsuit is to force Verizon to comply with the terms of the Aug. 7 merger agreement, or to obtain up to $1 billion in damages.
NorthPoint says Verizon had no legal reason to terminate the companies' merger. NorthPoint officials believe Verizon canceled the agreement to avoid making obliged investments in NorthPoint, in the belief that this would boost Verizon's stock price.
Verizon cited NorthPoint's deteriorating business and financial conditions when it terminated the merger agreement in late November. NorthPoint's stock price has plummeted to under $1 over the course of 2000.
The day before filing the lawsuit, NorthPoint laid off 19% of its workforce to reduce expenses. One of the reasons for the cuts, NorthPoint officials said, was Verizon pulling out of the merger agreement.
NorthPoint: www.northpoint.com
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