Ebbers and chums pay $51m to settle pensions suit
Worldcom employees sue ex-CEO
Bernie Ebbers, disgraced ex-chief executive of Worldcom, and 18 other senior executives have settled a class action suit brought on behalf of employees who saw the value of their pensions disappear when the company's shares collapsed.
The Worldcom pension fund owned 46m shares in the company. These collapsed from $8.27 in March 2002 to just 8 cents in July when it went into Chapter 11 bankrupcy protection. The case said Worldcom executives were derelict in their duty of care by buying and keeping Worldcom stock when they knew the company was overstating its earnings.
MCI, as Worldcom is now called, will pay about $19m as part of the settlement. Ebbers could pay as much $4m - he has to pay up to one per cent of whatever amount he pays back to MCI.
The settlement leaves fund trustee Merrill Lynch Trust Co. of America as the only active defendant. Lawyers for employees are seeking $100m from the company. ®