A federal judge approved a recently revised $750 million settlement between federal regulators and
on Monday, saying it "reflects the realities of this complex situation." It would be the largest penalty to date against a corporation that isn't a broker-dealer.
"The proposed settlement is not only fair and reasonable but as good an outcome as anyone could reasonably expect in these difficult circumstances," wrote U.S. District Judge Jed S. Rakoff in his opinion.
Shareholders of WorldCom will receive $750 million in compensation, a third of which will be paid in the form of
stock. This settlement provides 50% more than the $500 million shareholders would have received under the original proposed plan.
MCI filed for bankruptcy in July 2002 after it had begun to disclose an accounting fraud that would eventually reach an estimated $11 billion. The bankruptcy filing wiped out the stock that had once been worth a total of $180 billion.
The company reported that it had $3.7 billion in cash on hand at the end of April.