DENVER — A Qwest bankruptcy has never been discussed — internally or with the board of directors — and the "B" word is not even on the board, the Denver telecommunications company's chief executive officer said.
"I don't have plan B, it's not there," Richard Notebaert said. "If you had been with me 24 hours a day, seven days a week over the past two months I've been here, you would never have heard us talk about this. . . . I didn't come for any reason other than to run a successful company."
Notebaert talked about the obligation he feels to the company's 55,000 employees and their families, retirees and the community at large.
"Walk around the city of Denver like I do," said Notebaert, who's living in a downtown hotel until his house is ready to move into next month.
"We own a lot of real estate. We have a lot of employees here. We are really important to the economies of the states that we serve. If you ever do something like that (bankruptcy), everyone's 401(k), it doesn't go from 100 to 9, it goes to zero.
"The stock's gone down, and that's a tragedy. My job is to get it back up, not 'zero' it."
Notebaert also reiterated that it likely will take months, not days, for Qwest and its new KPMG auditing team to determine how to restate the company's prior financial statements. Notebaert reiterated that Qwest also is working with the Securities and Exchange Commission on the matter.
Qwest has acknowledged making $1.5 billion worth of accounting errors between 1999 and 2001 by incorrectly applying the policies of its former auditor Arthur Andersen.
Now Andersen policies themselves are under review. Under former Chief Executive Joseph Nacchio, Qwest used those policies to
justify booking a sizable amount of revenue upfront from fiber-optic capacity sales and swaps.
The accounting review could lead Qwest to decide that it should have spread the revenue over time, typically 20 years. Or in the case of "like for like" swaps, Qwest could decide it should not have recognized revenue at all, Notebaert said.
Or, he said, KPMG might agree with the Andersen policies.
Notebaert said the company would be deferring to KPMG on the matter.
Investigators are believed to be focusing on Qwest swaps with Global Crossing and Enron in 2001. Besides accounting issues, investigators likely are seeking to determine whether the deals were "sham" transactions designed solely to boost revenue.