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Bernie Ebbers, the former chief executive of WorldCom found guilty in March of leading an $11bn accounting fraud at the telecommunications company, has agreed to pay up to $45m to settle outstanding litigation against him, prosecutors said on Thursday.
Mr Ebbers will make an initial cash payment of $5m, and his assets will be liquidated to provide up to a further $40m, said David Kelly, US attorney for the southern district of New York. Those assets include his luxury home in Clinton, Mississippi, a multi-million tax refund due to him, real estate ventures, timber land interests, a golf course, and a marina.
Mr Kelly said the $5m cash payment would go to WorldCom investors who brought a class-action lawsuit against Mr Ebbers and others. Proceeds from the assets sales will be split between the investors and MCI, the successor company to WorldCom.
The settlement must has to be approved by Judge Denise Cote, the district judge presiding over civil litigation relating to WorldCom, which has resulted in agreements by the company’s former directors, auditors and bankers to pay more than $6bn.
Mr Ebbers will be sentenced this month. Other than money to pay legal bills and to provide a modest living allowance for his wife, he has been required to transfer all his remaining cash to the WorldCom investors.