 November 08, 2005
In 2002, WorldCom filed for chapter 11 bankruptcy. At the time the company was the nation's second largest long-distance provider and operated the world's largest Internet network. With the assistance of outside counsel, the Department of Law commenced this litigation in April 2003 against the underwriters and investment bankers involved in the issuance of WorldCom bonds purchased by some of the state's investment funds. "The state lost about $26 million that it had invested in WorldCom bonds prior to WorldCom's collapse, said Márquez. "While it was impossible to recover the full amount of our investment, the settlement we reached is significant and amounts to approximately 50-percent of the state's overall bond losses. I commend the efforts of the state's attorneys involved for obtaining such a large recovery." The state became a plaintiff in this litigation to recover losses on bond investments not covered in a class action lawsuit filed against the underwriters of these bonds. A majority of the proceeds the state will receive are to cover bond loss. Some of the recovery is for WorldCom stock loss as well. State pension funds held a significant portion of Alaska's investment in WorldCom said Márquez. The pension funds invested in this company included the Public Employees' Retirement System, the Teachers' Retirement System, the Judicial Retirement System and the National Guard and Naval Militia Retirement System. Treasury accounts also held investments in WorldCom. Treasury accounts are similar to mutual fund accounts, with different participants owning varying shares in the accounts. These owners include: the Mental Health Trust Fund, the Exxon Valdez Oil Spill Fund, the University of Alaska Trust Fund, the Constitutional Budget Reserve, the Public School Trust Fund and the Alaska Children's Trust Fund. Márquez said generally, when the state recovers damages in a lawsuit, the proceeds would go to the general fund. However, proceeds from this settlement will be used to offset WorldCom losses incurred by the state investment accounts.
Source of News:
Publish A Letter on SitNews Read Letters/Opinions Submit A Letter to the Editor
|
||
