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AT&T to settle At Home Corp. claims

Telecommunications giant will pay $340 million in bankruptcy

BEDMINSTER, N.J. — AT&T Corp. said Tuesday that it will pay $340 million to settle claims related to the bankruptcy of At Home Corp. — a now-defunct broadband business that AT&T acquired in 2000.

The telecommunications giant said the payment will not have a "material impact" on its results of operations.

Cable company Comcast Corp. — which bought AT&T's broadband operations in 2002 — will reimburse AT&T for half of the settlement amount, or $170 million, as set forth in the purchase agreement. The Philadelphia company said this payment will reduce its previously reported first-quarter profit by more than half.

AT&T will pay the funds to the Bondholders' Liquidating Trust, which is pursuing claims on behalf of the At Home estate. The company said the agreement settles all claims on behalf of the trust against AT&T and others in a state court case in California, a patent infringement suit and a number of bankruptcy court claims. The trust had charged that AT&T misappropriated At Homes' trade secrets to build its own high speed network. The California company — which operated at Excite@Home — filed for bankruptcy protection in 2001.

AT&T and Comcast also agreed to relinquish claims to about $60 million held in reserve by the At Home estate for AT&T as part of the bankruptcy proceedings. The bondholders trust said this means it will receive a total of $400 million in the settlement.

The agreement does not settle the trust's suits against Comcast and Cox Communications Inc., and the group said it will continue to pursue these claims. Cox also formerly owned a large stake in At Home.

The deal still needs to be approved by the U.S. Bankruptcy Court for the Northern District of California.

Comcast said its first-quarter profit will now be $143 million, or 6 cents per share. The company previously reported earnings of $313 million, or 14 cents per share, for the January-March period.

AT&T shares added 3 cents after-hours, having closed earlier up 14 cents at $19.17 on the New York Stock Exchange. Comcast shares slipped 12 cents after closing up 2 cents.