New York (July 8, 2003) -- A federal judge here approved a record settlement plan whereby bankrupt telecommunications concern WorldCom Inc. would pay a total of $750 million in cash and stock to settle fraud charges as a result of its mammoth accounting scandal.
U.S. District Judge Jed Rakoff approved WorldCom's settlement with the Securities and Exchange Commission, whereby the company agreed to pay $500 million in cash and $250 million in stock after it emerges from bankruptcy protection later this year. The proceeds would then be distributed to bondholders and shareholders.
In June 2002 WorldCom revealed that it had improperly recorded almost $4 billion in expenses as capital spending. The scale of the accounting fraud is estimated at about $11 billion.
WorldCom plans to change its name back to MCI after it emerges from bankruptcy protection later this year.
-- WebCPA staff
