Ex-WorldCom Directors’ Settlement Fails

Less than a month after it was announced, the settlement by ten former WorldCom outside directors of the securities class action claims against them has collapsed. The settlement was for $54 million, but it was the fact that $18 million of that sum was to be paid personally by the directors that led to extensive media commentary. According to an article (subscrip. req’d) in the Wall Street Journal, District Judge Cote (S.D.N.Y.) “rejected a provision that relates to how much the remaining defendants in the suit might have to pay if they lose the case.” Without that provision, the plaintiffs have chosen to withdraw from the settlement.