The New York judge overseeing the firm’s bankruptcy yesterday issued a final judgment as to monetary relief, which settles the Securities Exchange Commission’s claims against WorldCom over the accounting irregularities that led to its collapse last Summer. The agreement is subject to approval.
Under the plan agreed yesterday, the judge said WorldCom is liable for a $1.5bn penalty, but can satisfy its obligation by paying $500m when its plan of reorganization comes into effect. That cash will be held in a fund, which will eventually be paid out to victims of the company’s collapse.
WorldCom, which is in the process or rebranding itself as MCI, said yesterday it plans to emerge from Chapter 11 this Fall.
The monetary settlement between the SEC and WorldCom follows their partial settlement last November. Under this deal, WorldCom neither admitted not denied wrongdoing. In the immediate wake of WorldCom’s collapse, the SEC had accused it of improprieties of unprecedented magnitude. Under last November’s settlement WorldCom also pledged not to violate securities laws in the future.
Source: Computerwire
