Bernie Ebbers, the former chief executive of WorldCom Inc., will have lost more than his freedom if he goes to jail for his role in the $11 billion accounting fraud that brought the telecom titan into the largest bankruptcy in U.S. history.
Most of Ebbers assets will be distributed to WorldCom shareholders and bondholders under a settlement agreement in a class-action lawsuit. Ebbers will initially make a payment of $5 million following court approval of the agreement.
Ebbers also will surrender assets valued at between $25 million and $40 million, said New York State Comptroller Alan G. Hevesi, the lead plaintiff in the securities class-action litigation.
Mr. Ebbers was the person most responsible for the biggest corporate fraud in history and it is appropriate that he surrender most of his personal wealth to the stockholders and bondholders he betrayed, Hevesi said in a press statement.
Ebbers could spend the rest of his life in prison after being convicted earlier this year by a jury of spearheading WorldComs accounting fraud.
Sentencing is scheduled for July 13.