WorldCom Settlement Thrown Out

A federal judge voided part WorldCom’s $54 million settlement that would have put banks at risk to higher damages.

The settlement had called for the directors to pay $18 million out of their own pockets. The judge indicated that this could potentially complicate attempts to collect money from other defendants.

“The settlement is being terminated solely because of the potential impact on the amount other defendants might pay if the suit is successful,” said New York State Comptroller Alan Hevesi.

Business Report says,

“The WorldCom director payments, which would have been equal to slightly more than 20 percent of their combined net worth, were to be supplemented by another $36 million from insurance policies covering WorldCom.

Some investment banks that were defendants in the case had objected to the settlement, telling Cote they would be unfairly prejudiced unless all the defendants stood trial together.

The deal had been reached about two weeks before the start of a federal criminal trial against WorldCom Chief Executive Bernard Ebbers. That trial continued Wednesday before another judge in federal court in Manhattan.”

WebProNews | Breaking eBusiness News
Your source for investigative ebusiness reporting and breaking news.