WorldCom Settlement Is ApprovedJul 7, 2003 | UPI
A federal judge in Washington Monday approved a $750 million WorldCom settlement in a federal corporate-accounting fraud case.
The Wall Street Journal said Judge Jed Rakoff, in a 14-page opinion, wrote: "The proposed settlement is not only fair and reasonable but as good an outcome as anyone could reasonably expect in these difficult circumstances."
The Journal said the settlement gives WorldCom shareholders $750 million, 50 percent more than the $500 million they'd have received under the original proposed plan. A third of that payment, $250 million, would be in the form of stock in MCI, the new name for WorldCom.
WorldCom filed for Chapter 11 bankruptcy protection last year, after beginning to disclose an accounting fraud that has since reached about $11 billion. The bankruptcy filing wiped out the value of stock that had been worth $180 billion at its peak.
Rakoff said some shareholders would criticize the settlement but added it "reflects the realities of this complex situation."