February 13, 2006

Judge: NTG directors at fault, must pay interim CEO

A Baltimore judge ruled last month that two former Network Technologies Group directors, Nora Zietz and Robert Stewart, were negligent in their dealings with a consultant hired to turn around the company. But last week, the Maryland Court of Special Appeals affirmed a separate 2004 ruling that dismissed fraud claims by a major NTG investor against Zietz and Stewart. The telecommunications firm collapsed amid accounting fraud in 2002. The WorldCom and Enron cases set precedents that plaintiffs\' attorneys in shareholder fraud suits can use when trying to negotiate settlements, said Peter Henning, a law professor at Wayne State University in Detroit who co-edits a Web log on white-collar crime. Seeking personal payment from company directors, he said, \"becomes a bargaining chip\" in putting together a shareholder settlement.

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