WorldCom Settlement Comes Apart
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
New York State’s comptroller, Alan Hevesi, yesterday scuttled a landmark $54 million settlement that would have required former WorldCom Incorporated board members to pay $18 million of their own money after a judge rejected a key provision of the deal.
Judge Denise Cote ruled against a so-called ability-to-pay provision, which might have exposed underwriters to pay more damages depending upon the amount of blame a jury assigns to the directors.
As a result Mr. Hevesi, who oversees the New York State Common Retirement fund that is the lead plaintiff in the case, said in a statement that he would kill the settlement “solely because of the potential impact on the amount other defendants might pay if the suit is successful.”
The ex-board members will now stand trial in the class action suit.
