Sunday, September 25, 2005

Worldcom settlement tally

"NEW YORK (Reuters) - A U.S. judge on Wednesday gave final approval to a $3.6 billion legal settlement between more than a dozen investment banks and WorldCom Inc. investors stemming from the telecommunications company's collapse three years ago. Together with an earlier settlement by Citigroup Inc. (C.N: Quote, Profile, Research) worth nearly $2.6 billion, investors in total are expected to recover more than $6.1 billion. The payouts will be spread out among the more than 830,000 individual and institutional investors who are part of the class-action case. The settlement, approved by Manhattan federal judge Denise Cote in a written ruling, involves banks including JP Morgan Chase & Co (JPM.N: Quote, Profile, Research) and Bank of America Corp. (BAC.N: Quote, Profile, Research). Cote approved the Citigroup settlement last November.

"The latest settlements "are, in virtually each instance, of historic proportions," Cote wrote. The investment banks settled the case as a way to close the door on potential legal liabilities they faced. Under the settlement, about $5 billion of the more than $6 billion total recovery would go to WorldCom bond holders, while stock investors would get more than $1 billion.

"The class-action case accused investment banks of helping WorldCom sell bonds when they should have known the company was concealing its true financial condition." (http://olympics.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2005-09-21T201603Z_01_MOR164922_RTRUKOC_0_US-FINANCIAL-WORLDCOM-SETTLEMENT.xml)

"Citigroup, JPMorgan Chase and at least 10 other investment banks agreed to pay $US94 million ($124 million) to settle claims brought by Ohio pension funds over investment losses on WorldCom securities. Other banks that settled with the Ohio pension funds included Bank of America, Credit Suisse First Boston, Lehman Brothers, Deutsche Bank and ABN Amro, Ms Gatchell said.

"The Ohio Public Employees Retirement System received $37.9 million of the settlement, the most of any fund, according to Ms Gatchell. Also in the settlement were: the Ohio Bureau of Workers Compensation; State Teachers Retirement System of Ohio; Ohio Police and Fire Pension Fund; School Employees Retirement System of Ohio; and the Ohio State Highway Patrol Retirement System. Lawyers' fees and expenses totalled $16.8 million, Ms Gatchell said." (http://www.smh.com.au/news/business/worldcom-banks-pay-funds-124m/2005/09/23/1126982229206.html)

Related bits of Stew:
http://guambatstew.blogspot.com/2005/08/we-did-nothing-wrong-mind-you-but.html
http://guambatstew.blogspot.com/2005/08/thatll-teach-em.html
http://guambatstew.blogspot.com/2005/09/question-of-priorities.html
http://guambatstew.blogspot.com/2005/08/bad-broth.html
http://guambatstew.blogspot.com/2005/09/full-fair-and-timely-disclosure.html

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