MCI on Wednesday won approval for its settlement with the U.S. Securities and Exchange Commission (SEC) from the court overseeing its bankruptcy case, the company said.
The U.S. Bankruptcy Court for the Southern District of New York approved the settlement, under which victims of MCI's fraud are to receive US$500 million in cash and $250 million in shares, MCI said in a statement Wednesday.
The ruling resolves all claims by the SEC against MCI, still legally called WorldCom Inc., for its past accounting practices, the company said. Shareholders, bondholders and other victims will get the settlement proceeds when MCI emerges from Chapter 11 bankruptcy protection, the Ashburn, Virginia, telecommunications company said.
The SEC's legal proceedings against MCI began in June last year. It filed fraud charges the day after the company said it would restate earnings for five consecutive quarters ending with first quarter of 2002, due to accounting irregularities. MCI later admitted, by stages, to further accounting irregularities totaling more than $9 billion.