United States District Court, S.D. New York
July 11, 2005.
IN RE WORLDCOM, INC. SECURITIES LITIGATION. This Document Relates to: 02 Civ. 3288 02 Civ. 4973 02 Civ. 8230 02 Civ. 3416 02 Civ. 4990 02 Civ. 8234 02 Civ. 3419 02 Civ. 5057 02 Civ. 9513 02 Civ. 3508 02 Civ. 5071 02 Civ. 9514 02 Civ. 3537 02 Civ. 5087 02 Civ. 9515 02 Civ. 3647 02 Civ. 5108 02 Civ. 9516 02 Civ. 3750 02 Civ. 5224 02 Civ. 9519 02 Civ. 3771 02 Civ. 5285 02 Civ. 9521 02 Civ. 4719 02 Civ. 8226 03 Civ. 2841 02 Civ. 4945 02 Civ. 8227 03 Civ. 3592 02 Civ. 4946 02 Civ. 8228 03 Civ. 6229 02 Civ. 4958 02 Civ. 8229.
The opinion of the court was delivered by: DENISE COTE, District Judge
PRELIMINARY APPROVAL ORDER REGARDING SETTLEMENT WITH BERNARD J.
A. Lead Plaintiff, Alan G. Hevesi, Comptroller of the State of
New York, as Administrative Head of the New York State and Local
Retirement Systems and as Trustee of the New York State Common
Retirement Fund, and the Additional Named Plaintiffs, Fresno
County Employees Retirement Association, the County of Fresno,
California, and HGK Asset Management, Inc., and the Class
(collectively, "Plaintiffs"), and (ii) Defendant Bernard J.
Ebbers ("Ebbers") (collectively with Plaintiffs, the "Parties")
have entered into a settlement (the "Settlement") of the claims
asserted against Ebbers in the class actions consolidated in the above-captioned
action (the "Action"), the terms of which are set forth in a
Stipulation of Settlement, dated July 6, 2005 (the
B. Lead Plaintiff and Ebbers have moved, pursuant to Rule 23(e)
of the Federal Rules of Civil Procedure, for an Order
preliminarily approving the Settlement; and
C. The Court having read and considered the Stipulation and the
proposed form of Judgment, and finding that substantial and
sufficient grounds exist for entering this Order;
IT IS HEREBY ORDERED:
1. For purposes of this Order, the Court adopts all defined
terms as set forth in the Stipulation.
2. The Court preliminarily approves the Settlement, as
reflected in the Stipulation, as being fair, just, reasonable and
adequate, pending a final hearing on the Settlement.
3. The Certain Cash Assets shall be deposited into the Escrow
Account within three business days after entry of this
Preliminary Approval Order, which cash shall be deemed to be held
in custodia legis.
4. Lead Plaintiff shall coordinate with MCI to draft the Trust
Agreement, establish the Trust, retain the Trustee, obtain the
authorizations, consents, and approvals necessary or appropriate
to effectuate the transfer of the Trust Assets, and commence the
marketing and sale of Trust Assets. 5. The cash in the two accounts of BJE Enterprises, LLC
(approximate amount: $173,000) shall promptly be deposited into
an account established for the operation of the Trust.
6. Pursuant to the Stipulation, Lead Counsel may utilize up to
$100,000 out of the Settlement Fund to fund the Notice and
Administration Fund to assist in paying certain expenses incurred
by Lead Counsel pursuant to the Stipulation in connection with
7. Institution or prosecution of any action or claim that is
subject to the release, dismissal or bar provisions contemplated
by the Settlement, including without limitation the provisions of
paragraphs 5 and 23 of the Stipulation, is hereby enjoined
pending further order of the Court.
8. Prosecution by any Previously Settling Defendants of any
action or claim for contractual or other indemnity or
contribution against the Ebbers Releasees, arising out of or
related to the claims or allegations asserted by Plaintiffs in
the Litigation, whether arising under state, federal or foreign
law as claims, cross-claims, counterclaims, or third-party
claims, whether asserted in the Complaint, in this Court, in any
federal or state court, or in any other court, arbitration
proceeding, administrative agency, or other forum in the United
States or elsewhere, is hereby enjoined pending further order of
the Court. Provided, however, that the injunction stated in this
paragraph shall not apply to claims that may be asserted by
Previously Settling Defendants in cases of persons who timely
opted out of the Class and did not submit a valid request to
revoke the prior request for exclusion as allowed by the Court. 9. Prosecution by Ebbers of any action or claim for contractual
or other indemnity or contribution against the Previously
Settling Defendants, arising out of or related to the claims or
allegations asserted by Plaintiffs in the Complaint, whether
arising under state, federal or foreign law as claims,
cross-claims, counterclaims, or third-party claims, is hereby
enjoined pending further order of the Court. Provided, however,
that the injunction stated in this paragraph shall not apply to
claims that may be asserted by Ebbers in cases of persons who
timely opted out of the Class and did not submit a valid request
to revoke the prior request for exclusion as allowed by the
10. Subject to final approval of the Settlement, the Previously
Settling Defendants shall be entitled to judgment credit in an
amount that is the greater of the amount allocated in the
Settlement of claims for which a Previously Settling Defendant
may be found liable for common damages or, for each such claim,
the proportionate share of Ebbers' fault as proven at trial.
11. Nothing herein shall prohibit a Previously Settling
Defendant from pursuing defenses in the Litigation based on the
alleged responsibility of Ebbers.
12. The hearing to address the fairness and adequacy of the
Settlement shall occur on September 9, 2005, at 2:30 p.m., and
the procedures for objecting to the Settlement shall be as set
forth in the Hearing Order dated June 14, 2005 (the "June 14,
2005 Hearing Order"). As set forth in paragraph 5 of the June 14,
2005 Hearing Order, no further notice shall be mailed to Class
Members, as this Settlement will not materially increase the
settlement funds recovered to date, and the cost of further
mailing, which would be the fourth to the Class, would be
disproportionately high in comparison to the amount of the
Settlement. Notice of this Settlement shall be provided by
posting a description of the Settlement on the web site maintained by Lead
Counsel, at www.worldcomlitigation.com, and by publishing a
summary notice in The Wall Street Journal and The New York
Times, and over the PR Newswire. As set forth in paragraph 40 of
the previously disseminated Notice of Proposed Settlements of
Class Action with Settling Defendants and Bar Order, a Class
Member may request a personal copy of such notice of settlement
by mailing a request to the Administrator postmarked no later
than August 12, 2005 at the following address:
WorldCom, Inc. Securities Litigation
The Garden City Group, Inc.
P.O. 9000 #6247
Merrick, NY 11566-9000
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