WorldCom directors $54m lawsuit deal unravels
Class action goes ahead
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A deal by ten former directors of WorldCom top to cough up $18m (£9.5m) of their own cash to help settle a class action lawsuit following the collapse of the telecoms company in 2002 appears to have unravelled.
Last month the ten former directors - who weren't directly involved in the WorldCom accounting scandal but were named in lawsuits - agreed to pay out $54m (£28.7m) to settle the claim brought by former shareholders. $36m (£19m) was to be paid by the directors' insurers with the rest made up from their own pockets.
On Wednesday though, a federal judge rejected a key part of the $54 million settlement, reports USA Today. As a result, the whole deal put together by the ten former directors has been ditched and the class action lawsuit looks set to proceed at the end of the month.
Elsewhere, in New York, the trial of former WorldCom boss Bernie Ebbers continues with the prosecution calling a succession of accountants into the witness stand. They've been recalling their unease at being ordered to make changes to the company's accounts.
The New York Post reports that while former WorldCom beancounter Betty Vinson was anxious doctoring the company's accounts, she was also aware that Ebbers knew of her objections.
She said CFO Scott Sullivan - who has already pleaded guilty to fraud charges - told her in 2000: "Bernie knew there was a problem with some accountants not wanting to make entries."
Another accountant, Mark Abide, testified that Sullivan had ordered him to add billions of dollars in inflated assets. Quizzed by Ebbers defence team Abide said he thought Sullivan had ordered the work to be done and not Ebbers.
Ebbers denies the fraud charges. The trial is expected to last eight weeks. ®
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