SETTLEMENTS

Multiple Settlements With Underwriter Defendants, Former WorldCom Directors and Officers and Former WorldCom Auditor Total Over $6.13 Billion for WorldCom Investors - By Far The Largest Securities Class Action Recovery In History

(Copies of Stipulations and Settlement Agreements, and Notices of Settlement to date in this action are provided below.)

On July 26, 2005, New York State Comptroller Alan G. Hevesi, the Lead Plaintiff in the WorldCom Securities Class Action Litigation, announced that settlements had been reached with former WorldCom executives Scott Sullivan, David Myers, and Buford Yates. With these three settlements, each of the defendants in the WorldCom Securities Class Action has settled with Comptroller Hevesi. Taken with the anticipated proceeds from the Sullivan settlement, the total recovery obtained for the WorldCom investor class exceeds $6.136 billion, with $18 million to $28 million in additional money expected to be recovered from the sale of assets covered by the June 30, 2005 settlement with former WorldCom CEO Bernard Ebbers.

On April 25, 2005, after four weeks of trial and two days before closing arguments were scheduled before Judge Denise Cote, Arthur Andersen LLP, the final defendant in the WorldCom securities class action, agreed to settle for $65 million in cash, plus the possibility of certain contingent payments.

Previously, on March 21, 2005, former WorldCom Chairman Bert Roberts, the 12th and final director defendant in the WorldCom securities class action, has agreed to pay a total of $4.5 million from his own pocket to settle the claims against him in this action. On March 18, 2005, 11 other former WorldCom director defendants agreed to pay a total of $20.25 million from their own pockets to settle the claims asserted against them. The insurance companies that had written directors and officers liability coverage for WorldCom will pay an additional $1 million to settle the claims against Roberts and an additional $35 million to settle the claims against the other former directors.

The Director settlements followed the $460.5 million settlement with Bank of America announced on March 3, 2005; the $100.3 million settlement with Lehman Brothers, Goldman Sachs, Credit Suisse First Boston, and UBS Warburg announced on March 4, 2005; the $428.4 million in settlements with ABN AMRO, Mitsubishi Securities International, BNP Paribas Securities Corp. and Mizuho International announced on March 9, 2005; and the $112.5 million in settlements with WestLB and Cabato Holding announced on March 10, 2005; the $325 million settlement with Deutsche Bank announced on March 10, 2005; the $572,840 settlement with Blaylock & Partners, L.P. and the $234,000 settlement with Utendahl Capital Partners, L.P. announced on March 16, 2005; the $2 billion settlement with J. P. Morgan Securities and certain of its affiliates announced on March 16, 2005 and the $2.575 billion settlement with the Citigroup Defendants, which was approved by District Judge Denise Cote in November 2004.

Settlement of Contingent Payment Claim with Arthur Andersen LLP

As noted above, Lead Plaintiff previously achieved settlements in this Litigation with various defendants totaling in excess of $6.1 billion plus interest for the benefit of the Class. One of the settlements previously achieved was with Arthur Andersen LLP (“Andersen”) and it provided for a cash payment of $65 million, as well as the possibility of certain contingent payments (the “Contingent Payment Claim”). On September 27, 2012, Lead Plaintiff and Andersen entered into an agreement to settle and release the Contingent Payment Claim in return for the immediate payment by Andersen of an additional $38 million in cash.

On December 14, 2012, the Honorable Denise Cote approved this Settlement as fair, reasonable, and adequate and approved Lead Counsel's motion for an award of attorneys fees and reimbursement of expenses.

If you are a Class Member, please review the full Notice of Proposed Settlement of Contingent Payment Claim With Arthur Andersen LLP (the “Notice”), which provides more details about this proposed Settlement. The Notice and the Agreement Between Lead Plaintiff and Arthur Andersen LLP Concerning Contingent Payment Claim are available below.
 


  • 12/14/12 – Judgment Approving Settlement with Arthur Andersen LLP of Contingent Payment Claim

  • 12/7/12 – Lead Plaintiff’s Reply Memorandum of Law in Further Support of Final Approval of Settlement with Arthur Andersen LLP of Contingent Payment Claim and in Further Support of Lead Counsel’s Application for an Award of Attorneys’ Fees and Reimbursement of Expenses

  • 12/6/12 – Affidavit of Jason Zuena Regarding Dissemination of the Andersen Notice and Summary Notice

  • 11/09/12 – Notice of Lead Plaintiff’s Motion for Final Approval of Settlement with Arthur Andersen LLP of Contingent Payment Claim and Lead Counsel’s Application for an Award of Attorneys’ Fees and Reimbursement of Expenses

  • 11/09/12 – Lead Plaintiff’s Memorandum of Law in Support of Final Approval of Settlement with Arthur Andersen LLP of Contingent Payment Claim and in Support of Lead Counsel’s Application for an Award of Attorneys’ Fees and Reimbursement of Expenses

  • 10/15/12 – Notice of Proposed Settlement of Contingent Payment Claim with Arthur Andersen LLP

  • 10/2/12 – Order Preliminary Approving Settlement with Arthur Andersen LLP of Contingent Payment Claim and Providing for Notice

  • 09/27/12 - Agreement Between Lead Plaintiff and Arthur Andersen LLP Concerning Contingent Payment Claim

  • 09/18/09 - Order Approving Final Distribution Plan Entered by Judge Cote

  • 09/17/09 - [Re-Revised Proposed] Order Approving Final Distribution Plan

  • 08/28/09 - Declaration of Shandarese Garr Concerning Certain Payment Objectors

  • 07/15/09 - Supplemental Reply Declaration of Shandarese Garr in Further Support of Lead Plaintiff's Motion for Approval of Final Distribution Plan

  • 07/15/09 - [Second Revised Proposed] Order Approving Final Distribution Plan

  • 06/24/09 - Compendium of Responses from Disputed Rejected Claimants and Payment Objectors (Tab 1 - Tab 17)


  • 06/24/09 - Reply Declaration of Shandarese Garr in Further Support of Lead Plaintiff's Motion for Approval of Final Distribution Plan


  • 06/24/09 - [Revised Proposed] Order Approving Final Distribution Plan

  • 04/21/09 - Lead Plaintiff's Notice of Motion for Approval of Final Distribution

  • 04/16/09 - Declaration of Shandarese Garr in Support of Lead Plaintiff's Motion for Approval of Final Distribution Plan  
  • [Proposed] Order Approving Final Distribution Plan
     
  • Lead Plaintiff’s Notice of Motion to Conduct a Second Distribution of the Net Settlement Fund
     
  • [Proposed] Order Approving Lead Plaintiff’s Motion to Conduct a Second Distribution of the Net Settlement Fund
     
  • Affidavit of Shandarese Garr in Support of Lead Plaintiff’s Motion to Conduct a Second Distribution of the Net Settlement Fund
     
  • 12/21/07 - Lead Plaintiff's Letter to Judge Cote Regarding Notice of Motion for Second Distribution of the Net Settlement Fundd
     
  • Proposed Order Approving Lead Plaintiff's Motion to Conduct an Initial Distribution of the Net Settlement Fund
     
  • 11/21/06 - Lead Plaintiff's Notice of Motion to Conduct an Initial Distribution of the Net Settlement Fund
     
  • 11/21/06 - Lead Plaintiff's Letter to Judge Cote Regarding Notice of Motion for Initial Distribution of the Net Settlement Fund

  • 09/02/05 - Notice of Filing of Confidential Supplemental Settlement Stipulations (FILED UNDER SEAL)

  • 09/02/05 - Notice of Filing of Settlement Stipulations

  • 07/29/05 - Notice of Proposed Settlements of Class Action With Former WorldCom Executives (Executed by the Court)

  • 07/29/05 - Lead Plaintiff’s Letter to Judge Cote Regarding Revisions to Notice of Settlements With Former WorldCom Executive Defendants


    Attachments:

    > 07/29/05 - Notice of Proposed Settlements of Class Action With Former WorldCom Executive Defendants

    > 07/29/05 - Notice of Proposed Settlements of Class Action With Former WorldCom Executive Defendants ("Blacklined" Draft Marked to Reflect Proposed Revisions of the Court Provided on July 29, 2005)

  • 07/28/05 - Transcript of Hearing Before Judge Cote Regarding Sullivan Settlement

  • 07/28/05 - Lead Plaintiff’s Letter to Judge Cote Regarding Revisions to Notice of Settlements With Scott D. Sullivan, Buford Yates and David Myers

    Attachments:
    > 07/28/05 - Notice of Proposed Settlements of Class Action With Former WorldCom Executive Defendants

    > 07/28/05 - Notice of Proposed Settlements of Class Action With Former WorldCom Executive Defendants ("Blacklined" Draft Marked to Reflect Proposed Revisions Court Provided in July 28, 2005 Order)

  • 07/27/05 - Lead Plaintiff’s Letter to Judge Cote Regarding Settlements With Scott D. Sullivan, Buford Yates and David Myers

    Attachments:

    > 07/27/05 - [Proposed] Preliminary Approval Order Regarding Settlement with Buford Yates and David Myers (with revisions to July 26, 2005 version)
    > 07/27/05 - [Proposed] Preliminary Approval Order Regarding Settlement with Scott D. Sullivan (with revisions to July 26, 2005 version)
    > 07/27/05 - Notice of Proposed Settlements of Class Action With Former WorldCom Executive Defendants
    > 07/27/05 - Notice of Proposed Settlements of Class Action With Former WorldCom Executive Defendants ("Blacklined" Draft Marked to Reflect Proposed Revisions Court Provided in July 27, 2005 Order)
    > 07/27/05 - Email Correspondence Apparently Intended for Court Which Sent to the United States Attorney's Office and Forwarded to Lead Plaintiff

  • 07/26/05 - Lead Plaintiff’s Letter to Judge Cote Regarding Stipulations of Settlement With Scott D. Sullivan, Buford Yates and David Myers

    Attachments:

    > 07/26/05 - Stipulation of Settlement with Scott D. Sullivan
    > 07/26/05 - Stipulation of Settlement with Buford Yates and David Myers
    > 07/26/05 - Notice of Proposed Settlements of Class Action With Former WorldCom Executive Defendants

  • 7/26/05 - [Proposed] Preliminary Approval Order Regarding Settlement with Scott D. Sullivan

  • 7/26/05 - [Proposed] Preliminary Approval Order Regarding Settlement with Buford Yates and David Myers

  • 7/26/05 - [Proposed] Judgment Approving Settlement and Dismissing Action Against Scott D. Sullivan

  • 7/26/05 - [Proposed] Judgment Approving Settlement and Dismissing Action Against Buford Yates and David Myers

  • 07/11/05 - Transcript of Hearing Before Judge Cote Regarding Ebbers Settlement

  • 07/06/05 - Lead Plaintiff’s Letter to Judge Cote Regarding Stipualtion of Settlement With Bernard J. Ebbers

    Attachments:

    > 07/06/05 - Stipulation of Settlement with Bernard J. Ebbers <
    > 07/06/05 - [Proposed] Judgment Approving Settlement and Dismissing Action Against Bernard Ebbers
    > 07/06/05 - [Proposed] Order for Preliminary Approval Regarding Settlement with Bernard J. Ebbers

  • 04/25/05 - Stipulation of Settlement with Arthur Andersen

  • 04/25/05 - [Proposed] Order for Preliminary Approval Regarding Settlement with Arthur Andersen

  • 04/25/05 - [Proposed] Judgment Approving Settlement and Dismissing Action Against Arthur Andersen

  • 04/25/05 - Mediator's Statement Regarding Settlement with Arthur Andersen

  • 03/17/05 - Letter to Judge Cote Regarding Stipulation of Settlement, Proposed Preliminary Approval Order, Proposed Judgment Approving Settlement and Dismissing Action Against Former WorldCom Director Defendants James C. Allen, Judith Areen, Carl J. Aycock, Max E. Bobbitt, Francesco Galesi, Clifford L. Alexander, Jr., Stiles A. Kellett, Jr., Gordon S. Macklin, John A. Porter, Bert C. Roberts, Jr., The Estate of John W. Sidgmore, Lawrence C. Tucker

  • 03/17/05 - Stipulation of Settlement of Lead Plaintiff and Other Named Plaintiffs with Former WorldCom Director Defendants James C. Allen, Judith Areen, Carl J. Aycock, Max E. Bobbitt, Francesco Galesi, Clifford L. Alexander, Jr., Stiles A. Kellett, Jr., Gordon S. Macklin, John A. Porter, Bert C. Roberts, Jr., The Estate of John W. Sidgmore, Lawrence C. Tucker

  • 03/17/05 - Final Redlined Draft of Stipulation of Settlement of Lead Plaintiff and Other Named Plaintiffs with Former WorldCom Director Defendants James C. Allen, Judith Areen, Carl J. Aycock, Max E. Bobbitt, Francesco Galesi, Clifford L. Alexander, Jr., Stiles A. Kellett, Jr., Gordon S. Macklin, John A. Porter, Bert C. Roberts, Jr., The Estate of John W. Sidgmore, Lawrence C. Tucker

  • 03/17/05 - [Proposed] Judgment Approving Settlement and Dismissing Action Against James C. Allen, Judith Areen, Carl J. Aycock, Max E. Bobbitt, Francesco Galesi, Clifford L. Alexander, Jr., Stiles A. Kellett, Jr., Gordon S. Macklin, John A. Porter, Bert C. Roberts, Jr., The Estate of John W. Sidgmore, Lawrence C. Tucker

  • 03/17/05 - [Proposed] Preliminary Approval Order Regarding Seetlement With James C. Allen, Judith Areen, Carl J. Aycock, Max E. Bobbitt, Francesco Galesi, Clifford L. Alexander, Jr., Stiles A. Kellett, Jr., Gordon S. Macklin, John A. Porter, Bert C. Roberts, Jr., The Estate of John W. Sidgmore, Lawrence C. Tucker

  • 03/17/05 - Stipulation and Agreement of Settlement of Lead Plaintiff and Other Named Plaintiffs with Defendant J.P. Morgan Chase

  • 03/17/05 - Stipulation and Agreement of Settlement of Lead Plaintiff and Other Named Plaintiffs with Defendant Blaylock & Partners

  • 03/17/05 - Stipulation and Agreement of Settlement of Lead Plaintiff and Other Named Plaintiffs with Defendant Utendahl Capital Partners

  • 03/15/05 - Stipulation and Agreement of Settlement of Lead Plaintiff and Other Named Plaintiffs with Defendant Caboto Holding SIM S.p.A.

  • 03/15/05 - Stipulation and Agreement of Settlement of Lead Plaintiff and Other Named Plaintiffs with Defendants WESTLB AG, Mizuho International plc, BNP Paribas Securities Corp. and Mitsubishi Securities International plc

  • 03/15/05 - Stipulation and Agreement of Settlement of Lead Plaintiff and Other Named Plaintiffs with Defendant ABN AMRO, Inc..

  • 03/15/05 - Stipulation and Agreement of Settlement of Lead Plaintiff and Other Named Plaintiff with Defendant Deutsche Bank

  • 05/07/04 - Memorandum of Agreement of Settlement of Lead Plaintiff and Other Named Plaintiff with Defendant Citigroup. (See below text for details regarding the Citigroup Settlement.)


    CITIGROUP SETTLES FOR $2.65 BILLION

    On May 10, 2004, Alan G. Hevesi, the Comptroller of the State of New York, in his capacity as sole Trustee of the New York State Common Retirement Fund and the Court-appointed Lead Plaintiff in the WorldCom Securities Class Action Litigation, announced a $2.65 billion settlement with the Citigroup, Inc., Citigroup Global Markets, Inc. (formerly known as Salomon Smith Barney, Inc.), Citigroup Global Markets Limited (formerly known as Salomon Brothers International Limited), and former securities analyst Jack Grubman. The settlement resolves all claims of the Lead Plaintiff and the Class against the Citigroup Defendants.

    District Judge Denise L. Cote granted final approval of the settlement on November 5, 2004. Judge Cote granted preliminary approval of the settlement on July 16, 2004. Click here to view Judge Cote's July 16, 2004 order.

    The Court-approved Notice of the Settlement was mailed to Class Members beginning on August 2, 2004. A Proof of Claim and Release form will accompany each Notice. The Court has established March 4, 2005 as the date by which Class Members must submit their Proof of Claim forms. Copies of the Notice are posted on this website, and can be accessed by clicking here.

    Click here for details on contacting the claims administrator and the answers to many frequently asked questions on the Citigroup settlement.

    The Class was certified on October 24, 2003, by Judge Cote, leading to a Notice that was sent to Class members on and after December 11, 2003. On August 15, 2002, the Comptroller was appointed as Lead Plaintiff for the WorldCom class action, and the law firms of Barrack, Rodos & Bacine and Bernstein Litowitz Berger & Grossmann LLP were approved as Co-Lead Counsel for the Class.

    Click here to view the Memorandum of Agreement between Citigroup and Lead Plaintiff.

    In announcing the settlement in a press release and at a press conference in which BRB Partner, Jeff Golan, and BLBG Partner, Sean Coffey, participated, Comptroller Hevesi stated: “With this settlement, we have gained an extraordinary recovery for WorldCom bondholders and stockholders. This settlement, while historic, is only the first step. We will continue to pursue our claims against the others who bear responsibility for the debacle at WorldCom, including the remaining 17 underwriters, WorldCom’s auditor, Arthur Andersen, and the former directors and senior officers of WorldCom.” In further commenting on the settlement, Comptroller Hevesi stated: “This settlement should serve as a wake-up call to those on whom the investing public depends to guard against corporate corruption such as occurred at WorldCom.” Click here to view the press release in full. During a hearing before District Judge Cote on May 11, 2004, the Judge referred to the proposed settlement as a "watershed moment" for the case, and urged all parties to the case and their counsel to "reflect on what has happened here and what they want to happen going forward." At the same hearing, the Judge reiterated that the trial with respect to all non-settling defendants will go forward, as previously scheduled, on January 10, 2005.

    BLBG Partners Max Berger and Sean Coffey and BRB Partners Leonard Barrack and Jeff Golan undertook the extensive negotiations leading to this historic settlement agreement with the Citigroup Defendants, which is second in amount only to the $3.2 billion settlement that the same two firms, as Co-Lead Counsel, helped to secure from Cendant and its outside auditor in the Cendant litigation. The negotiations were conducted under the auspices of District Court Judge Robert W. Sweet and Magistrate Judge Michael H. Dolinger, of the U.S. District Court for the Southern District of New York, and culminated with a face-to-face meeting between Comptroller Hevesi and Citigroup's Chief Executive Chuck Prince on Thursday, May 6, 2004.

    The settlement resolves all claims of the Class asserted against the Citigroup Defendants in the WorldCom securities class action, which fall into two categories: claims arising from WorldCom’s public bond offerings in May 2000 and May 2001, and claims arising out of the purchase of other publicly-traded WorldCom securities in the open market between April 29, 1999 and June 25, 2002 (the "Class Period").

    As reported by the Comptroller, the Citigroup Defendants agreed to pay $1.4575 billion to settle the claims of investors who purchased bonds that WorldCom issued in May 2000 and May 2001, for which Salomon served as underwriter for approximately one-third of the outstanding bonds issued in those offerings. The litigation continues against the 17 investment banks that underwrote the remaining two-thirds of those WorldCom bonds, including J.P. Morgan Securities, Bank of America Securities, and Deutsche Bank. Comptroller Hevesi noted that the settlement with the Citigroup Defendants offers the other banks the option to settle within 45 days at the same pro rata ratio as Salomon Smith Barney. If the banks accept that offer, another approximately $2.8 billion would be paid to bond purchasers.

    In addition, the Citigroup Defendants agreed to pay $1.1925 billion to investors who purchased WorldCom common stock and certain other publicly-traded securities of WorldCom during the Class Period.


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