A litigation trust comprised of former FairPoint Communications creditors has filed a lawsuit against Verizon, claiming the company sold FairPoint "inferior assets that had no future."
In a $2 billion fraudulent transfer lawsuit filed in North Carolina, the trust alleges FairPoint's $2.3 billion purchase of Verizon's landlines in northern New England in 2008 led it to declare bankruptcy in 2009, according to The Associated Press. The complaint says Verizon lured FairPoint into the deal in order to rid itself of aging networks, and that FairPoint executives felt trapped when they realized what was happening. FairPoint declined to comment on the lawsuit because it was filed by a trust created for the benefit of FairPoint creditors who lost money during the bankruptcy settlement.
Verizon called the lawsuit meritless, arguing the sale of its assets went through thorough review and received regulatory approval.
FairPoint emerged from bankruptcy in January after shedding about $1.7 billion in debt.