Eleven of WorldCom Inc.’s former directors who served on the WorldCom board between 1999 and 2002 yesterday agreed to revive a settlement that the District Court had earlier rejected (see earlier posts here and here) under which the directors agreed to pay $55.25 million in the WorldCom class action, including $20.25 million of their own money. The balance of the settlement will be paid with insurance proceeds.
That leaves just two defendants remaining in the WorldCom class action, former director Bert Roberts and former WorldCom auditor Arthur Andersen. Jury selection is scheduled to begin in the case on Tuesday.
With the directors’ settlement, the WorldCom settlement pot stands at about $6.06 billion, which is the largest recovery to date in a class action securities case, at least until the banks start settling in the Enron class action case. Sixteen investment banks sold a total of $15.4 billion of WorldCom bonds in 2000 and 2001 and those bondholders suffered about $9 billion of losses.