The Jackson Clarion Ledger reports that the U.S. Court of Appeals for the Fifth Circuit has upheld the dismissal of a securities class action against WorldCom former executives Bernie Ebbers and Scott Sullivan. The decision can be found here.
It is important to note, however, that this suit was not based on the accounting irregularties that led to WorldCom’s recent bankruptcy. Instead, it was based on the failure of WorldCom to write-off certain receivables in 2000.
Quote of note: “In the original complaint, shareholders claimed Ebbers and Sullivan withheld information about $685 million in write-offs of uncollectible receivables. The ruling said, ‘the plaintiffs simply ignore evidence that WorldCom frequently took large write-offs and that, indeed, a $768 million write-off had been taken in 1999.'”
The 10b-5 Daily 