WorldCom Settlement Cleared

A judge in New York clears a $6.1 billion payout.
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A U.S. judge in New York approved the $6.1 billion WorldCom settlement.

The approval Wednesday by District Court Judge Denise Cote clears the way for payments to about 830,000 investors and institutions that lost money in WorldCom's $11 billion fraud and collapse.

WorldCom emerged from bankruptcy as

MCI

(MCIP)

and is involved in a pending merger with

Verizon

(VZ) - Get Report

.

Earlier this year, investors negotiated more than $6 billion worth of settlements from about a dozen banks named as defendants in shareholder lawsuits. The final settlement tally is just shy of the $7 billion payout coming to Enron investors.

Among the biggest WorldCom bankers that agreed to reimburse investors is

JP Morgan Chase

(JPM) - Get Report

and

Citigroup

(C) - Get Report

. JP Morgan agreed to pay $2 billion and Citigroup $2.65 billion to settle the litigation.

Convicted fraudster and former WorldCom CEO Bernie Ebbers has been forced to sell nearly all his personal holdings to contribute to a fund to repay shareholders. Ebbers is currently appealing his conviction and 25-year prison sentence.