A landmark agreement by former WorldCom directors to pay millions of dollars of their own money to settle with investors was revived on Friday, about six weeks after it was scuttled by objections from other defendants in the case.
Under the terms of the settlement reached on Friday evening, 11 former WorldCom directors will pay US$20 million out of their own pockets to settle with Alan Hevesi, comptroller of New York and trustee of the state's Common Retirement Fund.
Hevesi is lead plaintiff in the civil suit representing hundreds of thousands of investors who held WorldCom stock and bonds in the years immediately before its bankruptcy filing in 2002.
If the settlement is approved by the court, it will bring to US$6.057 billion the total amount recovered from defendants by Hevesi in the case.
The initial deal between the directors and Hevesi was announced in January and was viewed as a rare case of investors holding directors accountable for problems occurring on their watch. But the agreement fell apart in early February when the judge overseeing the case ruled that an aspect of the deal was illegal because it would have limited the directors' potential liability and exposed other defendants in the case to larger damages.
Because all the banks in the case have now settled with Hevesi, the impediment to the directors' settlement was removed. J.P. Morgan Chase, a lead banker to WorldCom, settled on Wednesday. It was the last major bank to settle.
"We are delighted that with the last of the bank settlements, we can now revive this historic settlement and proceed to trial against WorldCom's former auditor, Arthur Andersen, and its former chairman, Bert Roberts," Hevesi said in a statement.
The former directors who were a part of Friday's settlement are Clifford Alexander, secretary of the army under former US president Jimmy Carter and later chief executive of Dun & Bradstreet; James Allen, former chief executive of Brooks Fiber Properties, a telecommunications company acquired by WorldCom; and Judith Areen, a former Georgetown Law Center dean.
Also, Carl Aycock, an early investor in WorldCom; Max Bobbitt, a private investor who was also chief executive of Metromedia China; Francesco Galesi, a real-estate developer; Stiles Kellett, a private investor who led WorldCom's executive compensation committee; Gordon Macklin, a former president of the National Association of Securities Dealers; John Porter, a private investor who has filed for personal bankruptcy in Florida; and Lawrence Tucker, a partner at Brown Brothers Harriman.
The estate of John Sidgmore, a former WorldCom executive and director who died in 2003, also agreed to the settlement.
The directors who settled with the New York fund neither admitted nor denied wrongdoing, as is customary. All were WorldCom directors from 1999 to 2002.
Bert Roberts, WorldCom's former chairman, did not agree to the deal. He and Arthur Andersen, WorldCom's auditor, are the remaining defendants in the case. Jury selection is to begin on Thursday.
The settlement with directors came the same week that Bernard Ebbers, WorldCom's founder and chief executive, was found guilty of directing the US$11 billion accounting fraud that felled the company.
He was convicted of securities fraud, conspiracy and seven counts of filing false reports with regulators.
The directors' personal payments were a requirement of any deal from the early days of their negotiations with Hevesi's lawyers. Given the enormous size of the WorldCom debacle, Hevesi sought to make an example of the directors, lawyers involved in the settlement said.
The amounts being paid will differ for each director. The precise amounts were not disclosed, but the payments will amount to roughly 20 percent of the directors' aggregate net worth, not counting their primary residences and retirement accounts.
Insurance companies that provided directors' and officers' liability coverage to the WorldCom board members will also pay US$35 million under the settlement.
Gogoro Inc (睿能創意) yesterday launched its first electric bicycle, the Gogoro Eeyo 1, in Taiwan, after unveiling the bike in New York in late May and in France on Tuesday. The company said it would also introduce the series in other European countries such as Germany and the Netherlands. The “Eeyo project” is the fourth of Gogoro’s eight projects that concentrate on smart transportation, which includes Gogoro’s electric scooter, battery swap system and electric scooter sharing service, company founder and chief executive officer Horace Luke (陸學森) told a media briefing in Taipei. “There are various types of city commuters. We will not
EXPERIMENTAL DRUG: While news about a COVID-19 vaccine is more eye-catching, developing a treatment would be more viable, the Senhwa boss said Senhwa Biosciences Inc (生華科) aims to raise NT$1.5 billion (US$50.57 million) by issuing 15 million new common shares in the third quarter of this year to fund the research of new drugs, including the experimental drug Silmitasertib for the treatment of COVID-19, the company said on Monday. That would be the firm’s largest fundraising effort after it raised more than NT$1.4 billion from an initial public offering on the Taipei Exchange (TPEX) in April 2017, chief financial officer Sarah Chang (張小萍) told the Taipei Times by telephone. The price of the new shares would depend on the firm’s average share price
NOT A PANACEA: Offering 5G services would not solve the problem of declining telecom incomes, chairman Sheih Chi-mau said, expecting a flat 5G telecom revenue Chunghwa Telecom Co (中華電信) yesterday became the nation’s first telecom to debut its 5G services, offering tiered tariffs that include a threshold of NT$599 and flat rates, as it aims to switch half of its subscribers to the 5G network within three years. Subscribers would have unlimited data transmission for monthly fees starting at NT$1,399 — the same flat rate as when the company launched its 4G service in 2014 — and they can subscribe to the highest-rate plan for NT$2,699 per month for faster data transmission speeds and larger bandwidth, the company said. Data transmission speeds would be within the range
ROW: A probe would determine if the rights of shareholders who were not allowed to vote yesterday had been violated, while the stock exchange also wants answers The election of board directors yesterday at Tatung Co (大同) sparked controversy after the company blocked some institutional and individual shareholders from participating in the general shareholders’ meeting, prompting the Financial Supervisory Commission (FSC) to announce that the vote would be investigated. Lin Kuo Wen-yen (林郭文艷) was re-elected as chairwoman of the household-appliance maker’s nine-member board, but prior to the vote she announced that several shareholders would not have voting rights. They were being denied a vote because they had contravened the Business Mergers and Acquisitions Act (企業併購法), and the Act Governing Relations Between the People of the Taiwan Area and