Monday, August 21, 2006

Holding "Penalty", Ten Yards

An article from today's Washington Business Journal announced the resignation of Hugh Panero from the board of directors of Vonage Holdings Corp (NYSE: VG).

Readers will no doubt recall that Vonage and several of the company's officers and directors are currently defendants in a securities class action lawsuit stemming from the company's May 2006 initial public offering. The D&O Diary has a post on the Vonage litigation, here.

Panero is named as a defendant in the Vonage litigation.

Mr. Panero is far more well known for his regular job - as chief executive officer and a member of the board of directors at XM Satellite Radio Holdings Inc (NASDAQ: XMSR).

Readers may recall that XM is currently a defendant in several securities class actions and a shareholder derivative action.

You guessed it - Panero is also a defendant in the XM litigation.

Mr. Panero has some high caliber legal talent representing him in both the Vonage and XM litigations - Wilmer, Cutler Pickering Hale and Dorr LLP a/k/a WilmerHale - but I have some free life advice for him - don't join the board of any more companies with the word "holding" in their name.

A Forbes story on Panero's resignation from the Vonage board notes another interesting coincidence - the stock was up nearly 4% following the announcement of Panero's departure.

Daily Trivia: According to their most recent 10-Q, the so-called "access charges" that Vonage pays to other telephone companies to transfer or "terminate" calls back onto the public switched telephone network accounted for just under 60% of the company's direct cost of providing telephone services to subscribers.

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