Vonage Holdings Corporation (NYSE:VG) shares rose more than ten percent today after the company announced that it has settled its patent dispute with Nortel Networks without paying any money out of pocket. Investors have been concerned for some time that the VOIP provider may be forced into bankruptcy if it was ordered to pay hefty fines to old-telecom companies that it walked over. Shareholders applauded the move as it marks one of the final lawsuits hovering over the company.

The new settlement involves a limited cross license to three Nortel and three Vonage patents and dismisses claims relating to past damages and remaining patents. Vonage was initially dragged into this lawsuit after it acquired Digital Packet Licensing, which was suing Nortel at the time for the violation of three patents. Vonage continued the lawsuit before it was countersued by Nortel, who claimed that Vonage was violating 13 of its own patents and asked that the VOIP provider be shut down and kept from using the technology.

This settlement is a great deal compared to Vonage’s settlements in four other patent lawsuits where it was forced to pay the other side money for prior use of its product. These lawsuits sent Vonage shares tumbling amid worries that they would be forced to shut down their service because they were in violation of basic patents on the technology itself. However, these were all resolved in exchange for cash, where AT&T received $39 million while Sprint and Verizon received a total of $200 million.

In the end, this is good news for Vonage who now appears to be cleared of outstanding lawsuits that threatened to send them into bankruptcy. Shareholders are hoping that the company can now turn itself around and focus on building revenues and profitability. Combined, these factors make VG a stock worth watching closely!

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Sybase Inc. (NYSE:SY) directors may have to fight for their job after an activist hedge fund nominated its own slate of directors to the company’s board, according to a Schedule 13D/A filing with the SEC. Sandell Asset Management Corporation announced that it has notified Sybase Inc. of its intention to nominate three highly qualified independent candidates for election to the board of directors in 2008. Shareholders are hoping that this move could help unlock value in the company’s shares, which have remained somewhat stagnant.

Sandell’s move towards a proxy contest follows a letter and presentation delivered to the company on October 12, 2007 outlining specific actions the hedge fund believed the company should take to improve value for all shareholders. Specifically, the Sandell requested that the company immediately:

1. IPO and spin-off 100% of the Mobility segment.
2. Aggressively use the balance sheet to repurchase shares.
3. Sell the company as a whole or in parts.

Since that time, the company has taken no discernable action on any of these issues, nor has it taken any of its own actions to improve value. Sandell continues to believe that the actions detailed in its letter and presentation would materially improve the company’s valuation to the benefit of all shareholders, and it intends to conduct a proxy contest in order to realize those gains.

“We have attempted to encourage the company, both publicly and privately, to take action to improve its current discounted share price, but have been very frustrated by the apparent complacency of the board and management towards creating value,” said Thomas Sandell, founder of Sandell Asset Management. “We feel that shareholder representation on the board is warranted to ensure that all alternatives are being considered and a course of action is taken to bridge the gap between the current share price and its inherent value.”

Overall, any of the actions suggested by Sandell could go a long way in unlocking shareholder value. Proxy contests can be difficult and expensive, however, and it is uncertain as to whether they will be able to obtain the board seats that they need to enforce change. Regardless, this is definitely a stock worth watching into the next annual meeting!

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Delta Petroleum Corporation (NDAQ:DPTR) shares rose more than 20 percent today after Tracinda Corporation agreed to take a 35 percent in the energy company at a 23 percent premium to Friday’s close in a deal valued at around $684 million. Kirk Kerkorian’s Tracinda Corporation is well known activist hedge fund that specializes in restructuring companies and unlocking shareholder value. Shareholders are clearly confident that the activist will work to unlock value.

“Under Roger’s leadership, Delta Petroleum has become a very important company in the industry, with valuable resource plays, a strong asset base and well-positioned exploration projects that we believe hold significant growth potential,” said Tracinda Corporation in a statement. “Our investment will provide the company with the capital to accelerate its exploration activities, while giving Tracinda and Delta Petroleum shareholders the ability to realize value from its growth going forward.”

Delta Petroleum announced that the transaction would enable them to accelerate development drilling activities in its core areas, including the Piceance and Paradox Basins. Furthermore, the company noted that the investment will give it much more financial flexibility to fund its long-term drilling programs and allow for additional acquisitions.

“We are very pleased to have Tracinda Corporation as an investor and strategic partner in Delta,” said Chairman and CEO Roger Parker. “This transaction will provide the means to significantly increase the present value of our vast resource potential. The additional capacity provides Delta the financial flexibility and wherewithal to grow the company to new levels. We are very enthusiastic about the future for Delta.”

Notably, Tracinda Corporation withdrew their offer for a 20 percent stake in Tesoro Corporation – another energy company – last month due to a perceived lack of energy experience combined with a steep decline in refining profit margins. It appears that this investment may be a replacement designed to fill an energy spot in Mr. Kerkorian’s portfolio. Regardless, this is definitely a stock worth watching closely over the next few months!

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