VarTec Telecom trustee seeks $6.45 million overdue settlement payment

By Caroline Salls

Pittsburgh, Dec. 11 - VarTec Telecom, Inc.'s Chapter 7 trustee asked the U.S. Bankruptcy Court for the Northern District of Texas to force National Union Fire Insurance Co. to make a delinquent $6.45 million settlement payment, according to a Monday court filing.

According to the motion, VarTec Chapter 7 trustee Jeffrey H. Mims reached a $9 million settlement with National Union and five other adversary proceeding defendants on Oct. 24.

Under the court order approving the settlement, each defendant was required to pay its portion of the settlement payment by Dec. 6.

All of the settlement payments were made by the deadline, except for National Union's $6.45 million portion.

Although a National Union representative said an internal error caused a delay in the settlement payment, Mims said repeated attempts to find out exactly when the settlement payment would be made were unsuccessful.

As a result, Mims is asking the court to order National Union to pay its portion of the settlement amount within 48 hours, as well as related fees and expenses.

Mims has also asked the court to order National Union to pay interest accruing from Dec. 7 to the date the settlement payment is made.

VarTec, a Dallas-based telecommunications provider, filed for bankruptcy on Nov. 1, 2004. Its Chapter 7 case number is 04-81694.

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