The “courthouse steps” settlements continued Tuesday in the class action lawsuit over the WorldCom accounting scandal as four more financial institution-defendants reached deals with the plaintiffs in which the defendants agreed to pay a total of $428.5 million. Earlier posts on the WorldCom settlements may be reviewed here and here.
Under yesterday’s deals, ABN Amro Holding NV agreed to pay $278.4 million; Mitsubishi Securities International PLC, $75 million; and BNP Paribas Securities Corp. and Mizuho International, $37.5 million apiece, which increases the WorldCom settlement pot to $3.5 billion. Those settlements add to the list of financial institutions that have decided to hedge their ligitation risk in the case through settlement. As noted in the previous posts, Bank of America Corp. and four investment banks agreed to settle earlier this month, while Citigroup settled for a cool $2.58 billion last year.
These additional settlements increases the price of poker on the remaining financial institution defendants in the case, which include J.P. Morgan Chase & Co. and Deutsche Bank AG. As the number of deep pocket defendants is reduced, the risk of having to pay a greater percentage of a jury award increases for each of the remaining defendants. Settlement negotiations apparently are ongoing with the remaining defendants.