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The Supreme Court of Delaware has ruled that claims brought by a bankruptcy trustee against Verizon Communications Inc. were not securities claims for purposes of various insurance policies because the claims did not allege any violation of regulations, rules or statutes regulating securities.

The Case

In 2006, Verizon Communications Inc. divested its print and electronic directories business to its stockholders in a tax-free "spin-off" transaction. As part of the transaction, Verizon created Idearc Inc., and appointed John W. Diercksen, a Verizon executive, to serve as Idearc's sole director.

Idearc obtained Verizon's print and online directory business in exchange for about 146 million shares of Idearc stock, $7.1 billion in Idearc debt, and $2.5 billion in cash. Verizon then distributed Idearc common stock to Verizon shareholders. Idearc launched as a separate business with $9.1 billion in debt.