Vonage must pay $120 million to settle Verizon patent claims, Von...

that the court denied our request for a rehearing of the case,” Vonage said. “We are pleased to continue putting litigation behind us and keep focusing on our core business.” Vonage will pay Verizon $117.5 million plus $2.5 million to Verizon-chosen charities. Had Vonage won a rehearing or the court revoked the injunction, the company would have paid Verizon $80 million. The court’s denial isn’t surprising and strengthens fears that Vonage soon may face a liquidity crisis, said Stanford Group analyst Clayton Moran. Vonage must pay off $250 million debt by Dec. 2008, but has “zero” working capital, he said. Vonage will have $154 million cash after paying Verizon, most of it needed for business costs, he said. Vonage likely is “exploring [funding] alternatives,” Moran said, predicting the VoIP firm will address the debt issue next summer. The Verizon deal won’t affect terms of Vonage’s $80 million settlement with Sprint Nextel, said Stifel Nicolaus’s Rebecca Arbogast. A provision in the Sprint settlement said Sprint could get more money if the terms in a future Vonage patent settlement were “more favorable,” she said. But the Verizon settlement is structured so as to “nullify” that provision, she said.