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Welcome to the WorldCom ERISA Litigation
website. The website is designed to keep participants and beneficiaries
of the WorldCom 401(k) Salary Savings Plan informed of the status of
case settlements.
Case Status
On November 21, 2005 the Court gave final approval
to three WorldCom ERISA settlements. These settlements became “final”
on December 21, 2005, after the conclusion of the appeal period.
Our firm has been in contact with the Trustee,
MCI, and Plan Administrator, Merrill Lynch, regarding the distribution
of the settlement monies and has received information that they expect
to complete the distribution calculations within the next 30 days and
to begin the distribution shortly thereafter.
Class members who have a change of address should
contact Merrill Lynch at 866-401-5624.
If you were a participant in the WorldCom 401(k)
Salary Savings Plan (or any predecessor Plan) at any time between
September 14, 1998 and July 21, 2002, or are a beneficiary, alternate,
representative or successor to anyone who participated in the Plan
during that time period, you are a Class member for the WorldCom ERISA
Litigation and these settlements affect you. [Click
here for the definition of the Class.] If you are a Class
member, you do not need to do anything to obtain your share of the
settlements. Your share of the Settlement Fund will be distributed to
your account. If you no longer have an account, one will be created for
you, and you will be notified of such. The net settlement proceeds will
be distributed to the Plan for allocation in accordance with the Plan of
Allocation approved by the Court.
The Settlements
Three settlement agreements have been reached in
this case that address the ERISA claims related to the Plan.
2004 Partial Settlement
On October 18, 2004, the Court approved a partial
settlement in this case between Named Plaintiffs and Defendants
WorldCom, Inc.; Bernard J. Ebbers; the Estate of John W. Sidgmore;
Dennis W. Sickle; James C. Allen; Judith Areen; Carl J. Aycock ; Bert
C. Roberts, Jr.; Max. E. Bobbitt; Francesco Galesi; Stile A. Kellett,
Jr.; Gordon S. Macklin; Clifford L. Alexander; John A. Porter; Lawrence
W. Tucker; Dona Miller; Pamela Titus; Ray Helms; Stephanie Scott; and
Sandra Faircloth. The 2004 Settlement established a Settlement Fund
consisting of $46,750,000 from fiduciary liability insurance policies
and WorldCom/MCI and an initial payment of $400,000 in cash from
Defendant Bernard Ebbers. This amount was deposited in an escrow
account in September 2004.
Under the 2004 settlement, Mr. Ebbers also agreed
to pay at least $450,000 and up to $4 million in additional payments,
depending upon his solvency once the amounts of other claims against
him had been determined. Based upon a review of Mr. Ebbers financial
statements and considering the payments Mr. Ebbers will make in the
separate settlement of the securities fraud litigation as well as the
risk that Mr. Ebbers might file bankruptcy, ERISA Lead Counsel
concluded that it was extremely unlikely that the amount payable to the
ERISA Class under the Ebbers Note would exceed $450,000. Therefore, the
ERISA Plaintiffs agreed to accept, and the Court approved, a cash
payment of $450,000 in satisfaction of the Ebbers promissory note. This
payment, together with the settlement in the securities fraud
litigation, will result in the surrender of substantially all of Mr.
Ebbers’ assets. On July 12, 2005, Mr. Ebbers deposited an additional
$450,000 to the WorldCom ERISA Settlement Fund, to be held in escrow
pending the Court’s decision with respect to the fairness hearing.
The 2004 Partial Settlement provided for the
payment of notice and other Settlement implementation expenses, claims
reserves and certain other matters. In connection with the application
for final approval of the settlement, counsel for the Class applied to
the Court for an award of attorneys' fees and reimbursement of expenses
to be paid from the proceeds.
Settlement with Scott Sullivan
On November 21, 2005, the Court gave final
approval to a settlement of the ERISA litigation against Scott
Sullivan. Under the agreement, Mr. Sullivan shall pay, for the benefit
of the ERISA Class, 10% of the balance in his 401(k) plan and 10% of
the net proceeds on the sale of his house in Boca Raton, Florida. These
payments to the ERISA Class are expected to total approximately
$485,000.
Settlement with Merrill Lynch
Trust Company F.S.B.
On November 21, 2005, the Court gave final
approval to a settlement of the ERISA litigation against Merrill Lynch.
Under the settlement agreement, Merrill Lynch will agree to forego
payment of up to $200,000 for services it has provided to the Plan in
connection with the administration and distribution of the 2004 and
2005 settlement and to dismiss its pending appeal in exchange for the
Plaintiffs agreement to dismiss their pending appeal. Merrill Lynch’s
appeal had prevented distribution of the $47.15 million dollar
settlement previously approved by the Court, and Merrill Lynch’s
dismissal of its pending appeal will allow for the distribution of the
settlement funds.
These settlements do not
resolve claims against WorldCom or other defendants for violations of
federal or state securities laws. The securities claims are part of a
separate lawsuit. If you owned WorldCom stock, but were not part of the
WorldCom 401(k) Salary Savings Plan (or one of its predecessors ) and
can get information about the securities case at
http://www.worldcomlitigation.com/ or by contacting the
Claims Administrator for the In re WorldCom Securities Class
Litigation, at 1-866-808-3556.
The Class
United States District Judge Denise Cote certified
a class in this action that includes: All participants and
beneficiaries in the WorldCom 401(k) Salary Savings Plan (the “Plan”)
and its predecessor plans, including but not limited to, the MCI
Communications Corporation ESOP and 401(k) Plan, the IDB Communications
Group, Inc. 401(k) Savings and Retirement Plan, the Western Union
International, Inc. 401(k) Plan for Collectively Bargained Employees,
and the SkyTel Communications, Inc. Section 401(k) Employee Retirement
Plan, for whose individual accounts the Plan held shares of WorldCom
stock at any time from September 14, 1998 to the present. Excluded from
the Class are officers and directors of WorldCom, members of their
immediate families, and the heirs, successors or assigns of any of the
foregoing.
If you have further questions, please call
800-892-6230 or email at
wcom@kellerrohrback.com. Please do not contact the Court or
MCI.
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