Ebbers to forfeit assets in settlement

Bernard Ebbers, former chief of WorldCom, “will pay $5 million and transfer nearly all his assets into a liquidation trust to settle civil charges related to the company’s accounting fraud” if the settlement is approved by a federal judge. Here’s more from the AP article:

Federal prosecutors said the trust, which would sell off Ebbers’ assets, would be worth up to $40 million. As a result, prosecutors said they would not seek restitution when Ebbers is sentenced July 13.

The settlement springs from a class-action suit brought by investors against former WorldCom executives and board members, plus investment banks that underwrote WorldCom securities and auditing firm Arthur Andersen.

Ebbers has bigger problems, though: “Ebbers was convicted of fraud and conspiracy in the $11 billion accounting-fraud collapse of WorldCom in 2002. Prosecutors are seeking to put Ebbers behind bars for the rest of his life.”

In addition to the immediate cash payment, Ebbers must sell his multi-million-dollar home in Clinton, Miss., which he and his family must leave by Oct. 31, prosecutors said. He must also sell his interest in a number of businesses, including a trucking company, a golf course, a rice farm and a lumber company, the government said.

Ebbers will be required to forfeit all his remaining cash in the settlement, except for money for legal bills and what prosecutors described as a “modest living allowance” for his wife, Kristie.