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Banks may deny WorldCom financials falsified: WSJ
Seventeen former WorldCom bond underwriters have unveiled an unusual legal tactic - denying that any WorldCom financial reports were false, said WSJ.
Seventeen former WorldCom Inc bond underwriters, which are defendants in a lawsuit by investors over the phone company's 2002 collapse, have unveiled an unusual legal tactic -- denying that any WorldCom financial reports were false, the
Wall Street Journal
said on Wednesday.
The newspaper said Jay Kasner, a partner at the law firm Skadden Armps Slate Meagher & Flom LLP who represents the banks, revealed the position in an August 18 teleconference hearing with US District Judge Denise Cote, who is presiding over the case. The newspaper cited a court transcript of the hearing for that position.
Asked about Kasner's position, some of the banks said they believe some WorldCom filings were in fact false, a point they made in an August 23 motion to dismiss the case, the newspaper said.
But until the banks determine which filings were false and how they were misstated, spokeswomen for two of the banks said, the banks must keep their legal options open, it said.
The position of the 17 banks, which are led by JP Morgan Chase & Co, Deutsche Bank AG and Bank of America Corp, contrasts with the May decision by Citigroup Inc, another WorldCom underwriter, to settle for $2.65 billion. The other banks in June rejected a combined settlement offer exceeding $2.8 billion.
Spokeswomen for JP Morgan and Bank of America each told the newspaper their respective banks "do not contend that no financial fraud occurred at WorldCom." Kasner and Deutsche Bank did not immediately return calls seeking comment.
Worldcom, now known as MCI Inc, emerged in April from the largest US bankruptcy, following an estimated $11 billion accounting fraud, and after restating two years of results by $74.4 billion.
Several former WorldCom executives, including former chief financial officer Scott Sullivan, have pleaded guilty to criminal charges.
