• On January 22, 2013, following a 10-day bench trial, the U.S. District Court for the Northern District of Texas agreed with Verizon that its former subsidiary, Idearc, Inc., was not insolvent on November 17, 2006, the day Verizon spun it off to become a separate entity. The plaintiff – the litigation trustee of the Idearc bankruptcy estate – brought this case claiming that Verizon spun Idearc off to bury its unprofitable Yellow Pages business unit and thereby take the losses of that unit off Verizon’s books. Plaintiff’s expert testified that Idearc was only an $8.15 billion company the day it was spun off, far less than the debt Verizon left on its books when Idearc was spun off. But the court disagreed. Judge Joe Fish ruled that the company was worth at least $12 billion on the date of the spinoff, and thus was not insolvent at spinoff. The court held that “the plaintiff bears the burden of proving that Idearc was insolvent, that Idearc did not receive reasonably equivalent value in the spinoff for the debt and cash that it transferred to Verizon, or that Idearc did not have sufficient surplus at the time of the spinoff.” It concluded that, “because of the court’s valuation finding, it also appears that the plaintiff will be unable to meet this burden, so that all of the remaining legal claims will fail.” The court asked the plaintiff to state whether it would proceed with the remainder of the case in light of his adverse ruling on valuation. U.S. Bank N.A. v. Verizon Commc’ns Inc., No. 3:10-cv-01842 (N.D. Tex. Jan. 22, 2013).