New York officials have reached a settlement with the final trio of former WorldCom executives named in a shareholder lawsuit.
State comptroller Alan Hevesi announced the settlements Tuesday, saying former chief financial officer Scott Sullivan must liquidate his 401(k) account, valued at about $200,000, and also sell a mansion he was building in Florida, valued at $5 million after accounting for a number of liens on the property. Proceeds would go to WorldCom shareholders.
Sullivan, former controller David Myers and former chief of accounting Buford Yates, all testified in the trial against their former boss, WorldCom chief executive Bernard Ebbers.
Hevesi said his office has determined that neither Myers nor Yates have any assets left to contribute.
More than $6.1 billion in restitution has been recovered under the class-action suit brought by Hevesi, most from investment banks that underwrote WorldCom securities. Ebbers also has agreed to surrender his assets, which are expected to bring in another $18 million to $28 million.
A federal judge has scheduled a hearing Thursday to consider whether to give the settlement preliminary approval. Ebbers was sentenced to serve 25 years in prison earlier this month for his role in the accounting scandal. Erroneously declared revenues and expenses at WorldCom led to the discovery of an $11 billion accounting fraud, the largest securities fraud in history.
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