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WorldCom
to pay $250 million
Washington: Shareholders and bondholders who had
to lose thanks to WorldCom Inc will now receive $250 million
of common stock in the reorganised company. This is according
to a sweetened settlement the telecommunications firm
and the Securities and Exchange Commission (SEC) filed
on Wednesday. WorldCom, which entered bankruptcy protection
after it was dragged into a $11 billion fraud scandal,
will provide the stock in addition to the record $500
million fine it has already agreed to pay to settle SEC
fraud charges. "The supplemental relief, if approved,
will allow victims of the fraud to share in the potential
upside of owning WorldCom common stock when it emerges
from bankruptcy," the SEC said in a statement. The
stock will be distributed by an agent appointed by a federal
district court, it added. Both the bankruptcy court overseeing
WorldCom's reorganisation and the federal court handling
the civil fraud charges against the company would have
to approve the sweetened settlement.
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Rating
agencies warn of probable cut in California's rating
San Francisco: Two Wall Street ratings agencies
have warned that they may cut California's rock-bottom
credit even further due to stalemated talks to close a
$38 billion budget gap. This could drive up the state's
cost of borrowing by hundreds of millions of dollars.
Standard & Poor's Ratings Services and Moody's Investors
Service said a Republican-led movement to recall Governor
Gray Davis and the partisan fight in the legislature over
whether to increase taxes or cut programmes to plug the
budget shortfall as the reasons for their warnings. The
ratings agencies said the recall could further delay the
budget. Davis, in a statement, said the budget delay for
the fiscal year that started on 1 July was financially
dangerous for the state, but he added the Wall Street
warnings could prod lawmakers to reach an agreement. "I
continue to believe we are narrowing the differences,"
he said. Moody's said about $34 billion in debt is now
under review for a possible downgrade, while Standard
& Poor's credit watch affects $33.5 billion of debt.
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Vivendi
former CEO moves court for $24m in severance
Los Angeles: Ex-Vivendi Universal CEO Jean-Marie
Messier has petitioned a New York court to confirm a ruling
that Vivendi must pay him $23.7 million in severance,
reports say. The arbitration ruling, which surfaced in
news reports on 30 June, concerns a pay package Messier
was to have received after being ousted in a boardroom
coup one year ago. Messier left Paris-based Vivendi, owner
of the Universal Studios movie and television company
and French telecommunications provider Cegetel, under
a storm of controversy after amassing huge debts during
an acquisition binge that put Vivendi on the edge of bankruptcy.
Vivendi's new bosses led by current CEO Jean-Rene Fourtou
have said they do not want to pay Messier. Vivendi said
it will examine "all available legal actions"
to void the agreement that led to the severance package.
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