Eleven former WorldCom (now MCI) members of the board of directors have pledged to pay more than $20 million of their own funds to settle a class action lawsuit brought by shareholders of the embattled company’s stock.
The directors’ settlement is part of a total of more than $55 milion, with the balance being paid by insurance companies. The company’s two lead investment banks have pledged an additional $4.6 billion, and estimates are that the total amount paid out in the suit will surpass $6 billion.
A settlement of that size means that many shareholders will receive a substantial portion of their loss in stock value when the company engaged in accounting fraud and spiraled into bankruptcy.
Posted under Customer Service
This post was written by George Bounacos on March 21, 2005
