Opinion
Case No. 02-13533 (AJG), (Jointly Administered).
August 19, 2005
A hearing having been held on August 9, 2005 (the "Hearing"), to consider the motion, dated July 27, 2005 (the "Motion"), of MCI, Inc. ("MCI") f/k/a WorldCom, Inc., and certain of its direct and indirect subsidiaries (collectively, the "Reorganized Debtors"), for entry of an order, pursuant to Rule 7023 and 9019 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules") authorizing and approving the terms of the settlement agreement (the "Settlement") among MCI, Bernard J. Ebbers, and the New York Common Retirement Fund, in its individual capacity and as lead plaintiff and class representative for the certified class in the consolidated WorldCom federal securities fraud litigation ("WorldCom Securities Litigation") (the "Settling Parties"), all as more fully set forth in the Motion; and the Court having considered the Motion and relief requested therein; and upon the Motion, the papers in support thereof, the response thereto filed by the Arizona State Retirement System, and the record of the Hearing; and the Court having determined that the legal and factual bases set forth in the Motion and at the Hearing establish just cause for the relief granted herein; and upon all of the proceedings had before the Court and after due deliberation and sufficient cause appearing therefor,
Unless otherwise defined herein, all capitalized terms contained herein have the meanings ascribed to them in the Motion.
IT IS HEREBY FOUND AND DETERMINED THAT:
A. The Court has jurisdiction to consider the Motion and the relief requested therein pursuant to 28 U.S.C. §§ 157 and 1334. This matter is a core proceeding pursuant to 28 U.S.C. § 157. Venue is proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409.
B. Due and proper notice of the Motion and the Hearing was provided in accordance with the case management order and to all claimants with unresolved claims subject to the 14th Omnibus Objection, and the Office of the United States Trustee for the Southern District of New York and such notice was good, sufficient and appropriate under the circumstances. No other or further notice of the Motion or the Hearing is required.
C. The Settlement Agreement was entered into after good faith, arm's-length negotiations between and among the Settling Parties. The Settlement Agreement is for fair and reasonable consideration and is within the range of reasonableness. The Settlement Agreement is an exercise of the Company's sound business judgment and is in the best interests of the Company and its estates.
D. The Company's performance of its obligations under the Settlement Agreement is not in derogation of, nor does it require modification of, any provision of the Debtor's Modified Second Amended Joint Plan of Reorganization confirmed by this Court (the "Plan") or any prior order of this Court.
NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED THAT:
1. The Motion is granted and the oral stipulation between the Reorganized Debtors and the Arizona State Retirement System is approved.
2. Subject to final approval of the Settlement by the United States District Court for the Southern District of New York in the WorldCom Securities Litigation, the Settlement is approved pursuant to Bankruptcy Rules 9019 and 7023.
3. Reorganized Debtors are authorized to execute, deliver, implement, and fully perform any and all obligations, instruments, documents and papers and to take any and all actions reasonably necessary or appropriate to consummate the Settlement and the transactions contemplated thereby, provided, however, that nothing herein shall or shall be construed to derogate or otherwise modify any provision of the Plan or any prior order of this Court entered in the chapter 11 cases.
4. The NY Fund Claims are hereby deemed withdrawn, with prejudice. Except with respect to the proofs of claim filed by the Arizona State Retirement System and identified in decretal paragraph 5 of this Order, the Other Fund Claims, and any other claims held by members of the Class arising from or relating to the causes of action asserted in the WorldCom Securities Litigation shall be deemed disallowed and expunged from the claims registry to the extent the holder of such claim has not opted out of the Class. In the event the Settlement is not finally approved by the United States District Court for the Southern District of New York, all claims disallowed or withdrawn by this Order shall revert to their status as of the day immediately before the execution date of the Settlement.
5. The Arizona State Retirement System is hereby deemed to have waived any right to a distribution under the Plan or from these chapter 11 estates on account of the following Proofs of Claim, or otherwise: (1) claim number 22900, filed against WorldCom, Inc.; (2) claim number 22901, filed against MCI Communications Corporation; (3) claim number 22902, filed against WorldCom International Data Services, Inc.; (4) claim number 22903, filed against MCI Payroll Services, LLC; (5) claim number 22904, filed against MCI WorldCom Network Services, Inc.; (6) claim number 22905, filed against MCI WorldCom Communications, Inc.; (7) claim number 22906, filed against Metropolitan Fiber Systems of Arizona, Inc.; (8) claim number 22907, filed against WorldCom Wireless, Inc.; (9) claim number 22908, filed against WorldCom Payroll Services, LLC; and (10) claim number 22909, filed against WorldCom Purchasing, LLC. Notwithstanding the foregoing waiver, this Order shall not affect: (a) the Arizona State Retirement System's rights, if any, to receive proceeds as a member of the Class of the WorldCom Securities Litigation; or (b) the Arizona State Retirement System's rights, if any, to setoff pursuant to section 553 of the Bankruptcy Code and/or applicable non-bankruptcy law, or any claims or defenses of the Reorganized Debtors related thereto. In the event the Settlement is not finally approved by the United States District Court for the Southern District of New York, the Proofs of Claim filed by the Arizona State Retirement System shall revert to their status as of the day immediately before the execution date of the Settlement.
6. The requirement under Rule 9013-1(b) of the Local Bankruptcy Rules for the Southern District of New York for the filing of a memorandum of law is waived.