IN RE WORLDCOM, INC. SECURITIES LITIGATION

This Opinion considers the fairness of settlements reached
this year in the securities class action litigation arising from
the collapse of telecommunications giant WorldCom, Inc. The seventeen Underwriter Defendants consist of ABN/AMRO 1
Inc. ("ABN Amro"); Banc of America Securities LLC ("BOA");
Blaylock & Partners, L.P. ("Blaylock"); BNP Paribas Securities
Corp. ("BNP"); Caboto Holding SIM S.p.A. ("Caboto"); Credit
Suisse First Boston Corp. ("CSFB"); Deutsche Bank Securities,
Inc. ("Deutsche Bank"), f/k/a Deutsche Bank Alex. Brown, Inc.;
Fleet Securities Inc. ("Fleet"); Goldman, Sachs & Co. ("Goldman
Sachs"); J.P. Morgan Securities, Ltd. and J.P. Morgan Securities,
Inc. (now including Chase Securities Inc.) ("JP Morgan"); Lehman
Brothers Inc. ("Lehman Brothers"); Mizuho International plc
("Mizuho"); Mitsubishi Securities International plc
("Mitsubishi"), f/k/a Tokyo-Mitsubishi International plc; UBS
Warburg LLC ("UBS"); Utendahl Capital ("Utendahl"); and
Westdeutsche Landesbank Girozentrale ("West LB").

The Director Defendants are James C. Allen, Judith Areen, 2
Carl J. Aycock, Max E. Bobbitt, Clifford L. Alexander, Jr.,
Francesco Galesi ("Galesi"), Stiles A. Kellett, Jr. ("Kellett"),
Gordon S. Macklin, John A. Porter ("Porter"), Bert C. Roberts
("Roberts"), the Estate of John W. Sidgemore, and Lawrence C.
Tucker.

("WorldCom"). These settlements include the series of
settlements between the Lead Plaintiff and the seventeen
Underwriter Defendants;1 and those between the Lead Plaintiff and
the twelve Director Defendants,2 WorldCom's former auditor Arthur
Andersen LLP ("Andersen"), former WorldCom CEO Bernard J. Ebbers
("Ebbers"), former WorldCom CFO Scott D. Sullivan ("Sullivan"),
and former WorldCom officers Buford Yates ("Yates") and David
Myers ("Myers") (collectively, the "2005 Settlements"). The 2005
Settlements total $3.558 billion. Together with the settlement
between the Lead Plaintiff and the Citigroup Defendants (the
"Citigroup Settlement"), which received final approval on
November 14, 2004, the Class will recover $6.133 billion, plus
interest.

One Class Member filed a timely objection to the requested 3
attorneys' fees, but the objection was later withdrawn. Another
individual filed a late objection to the attorneys' fees, but she
has provided no evidence to rebut Lead Plaintiff's contention
that she is not a Class Member. The substance of her objection
will nevertheless be addressed.

Very few Class Members have filed objections to the 2005
Settlements. No one has objected to the amounts of the 2005
Settlements and there is only a single objection to the request
for attorneys' fees and expenses submitted by Lead Counsel for
the Class.3 Only a brief, conclusory objection was made to the
Plans of Allocation, which determine according to claim type how
settlement funds will be distributed. Most of the objections
address the scope of the claims release to be imposed pursuant to
the 2005 Settlements and the proposed Supplemental Plan of
Allocation distributed to the Class with a July 1, 2005 Notice.
With the three modifications to the Supplemental Plan
described below, the petition for approval of all of the 2005
Settlements is granted. Lead Counsel's application for
attorneys' fees and expenses is also granted.

Background

The relevant history of the Securities Litigation through
November 12, 2004 is described in an Opinion pertaining to the
Citigroup Settlement. See In re WorldCom, Inc. Sec. Litig., No.
02 Civ. 3288 (DLC), 2004 WL 2591402, at *1-*9 (S.D.N.Y. Nov. 12,
2004). That description, and the definitions therein, are
incorporated by reference into this Opinion.

The litigation even preceded the June 25 announcement: the 4
first securities class action was filed in this district on April
30, 2002.

In brief, WorldCom announced a massive restatement of its
financial statements for 2000 and 2001 on June 25, 2002 (the
"Restatement"), spurring numerous class actions and other
lawsuits.4 Virtually all federal litigation was transferred to
this Court by the Judicial Panel on Multi-District Litigation.
The securities class actions were consolidated on August 15,
2002, and the New York State Common Retirement Fund ("NYSCRF")
was selected as the Lead Plaintiff. The Lead Plaintiff filed a
Consolidated Class Action Complaint on October 11, 2002. The
securities class action, scores of actions filed by individual
plaintiffs (the "Individual Actions"), many of them large pension
funds, and other related securities actions were consolidated on
December 23, 2002 for pretrial purposes and are referred to as
the Securities Litigation.

An Opinion of May 19, 2003 decided various motions to
dismiss addressed to the class action complaint. In re WorldCom,
Inc. Sec. Litig., 294 F. Supp. 2d 431 (S.D.N.Y. 2003); see also
In re WorldCom, Inc. Sec. Litig., No. 02 Civ. 3288 (DLC) 2003 WL
21488087 (S.D.N.Y. June 25, 2003) (deciding Andersen's motions to
dismiss); In re WorldCom, Inc. Sec. Litig., No. 02 Civ. 3288
(DLC), 2003 WL 23174761 (S.D.N.Y. Dec. 3, 2003) (deciding motions
to dismiss by members of the Audit Committee of WorldCom's board
of directors). An Amended Complaint was filed on August 1, 2003;
a Corrected Amended Complaint was filed on December 1, 2003.
An Opinion of October 24, 2003 certified a class consisting
of all persons and entities who purchased or otherwise acquired
publicly traded securities of WorldCom during the period
beginning April 29, 1999 through and including June 25, 2002, and
who were injured thereby. See In re WorldCom, Inc., Sec. Litig.,
219 F.R.D. 267, 274-75 (S.D.N.Y. 2003). Putative Class Members
received a December 11, 2003 Notice of Class Action (the
"December 2003 Notice"). That notice informed Class Members that
they could opt out of the class action by February 20, 2004, a
date which was later extended to September 1, 2004.5 See
WorldCom, 2004 WL 2591402, at *5.

The $2.575 billion Citigroup Settlement was announced in May
2005. Id. Class Members received an August 2, 2004 Notice of
the proposed Citigroup Settlement (the "Citigroup Settlement
Notice"), which also informed them that the opt-out date had been
extended to September 1 and gave them instructions on how to
submit proofs of claim. A fairness hearing regarding the
Citigroup Settlement was held on November 5, 2004, and that
settlement was approved in a November 12, 2004 Opinion.
WorldCom, 2004 WL 2591402, at *9, *11. The following is an
overview of the significant events in the class action litigation
since the announcement of the Citigroup Settlement.

Completion of Discovery

The Citigroup Defendants settled with the Lead Plaintiff
just weeks before the conclusion of fact discovery. A three-week
stay was entered to allow the Lead Plaintiff and the Underwriter
Defendants an opportunity to determine whether they could also
resolve the litigation. The Underwriter Defendants rejected an
offer to settle with the Class using the same formula that
resolved Securities Act of 1933 ("Securities Act") claims in the
Citigroup Settlement (the "Citigroup Formula"). Fact discovery
resumed and was concluded on July 9, 2004. During June and July,
the Lead Plaintiff took forty-one depositions.

During the late summer and fall, the parties exchanged
expert reports and conducted expert discovery. The Lead
Plaintiff produced reports from five experts.

Summary Judgment Opinion Regarding the Underwriter Defendants
The Underwriter Defendants faced Securities Act Section 11
and Section 12(a)(2) liability stemming from massive bond
offerings in 2000 (the "2000 Offering") and 2001 (the "2001
Offering"). They filed motions for partial summary judgment on
several grounds, including their reliance defense under Section
11. They argued that they were entitled to rely on WorldCom's
audited financial statements and had no duty to investigate their
reliability unless they had reasonable grounds to believe that
the statements were not accurate. A December 15, 2004 Opinion
denied summary judgment on the reliance defense, noting that,
while underwriters generally may rely on audited financial
statements, a jury could find that one or more "red flags"
triggered a duty for the Underwriter Defendants to conduct
further investigation of WorldCom's financial status. See In re
WorldCom Sec. Litig., 346 F. Supp. 2d 628, 678-81 (S.D.N.Y.
2004). The Opinion also ruled that the Underwriter Defendants
were not entitled to summary judgment because of their receipt of
Andersen's comfort letters for the unaudited quarterly financial
statements incorporated into the Registration Statements for the
2000 and 2001 Offerings. Rather, although the comfort letters
were one factor a jury could consider, the Underwriter Defendants
still had to establish that they had performed a reasonable
investigation regarding any unaudited financials in order to
establish their due diligence defense under Section 11. See id.
at 681-85.

The Lead Plaintiff filed its own motion for partial summary
judgment against the Underwriter Defendants. It succeeded on the
issue of whether the Registration Statement for the 2001 Offering
was false and misleading, but was denied summary judgment in
regard to the 2000 Offering. Id. at 661.

The Excess Insurers had taken the position that the 6
policies they had issued were null and void.

The Court makes no judgment as to the wisdom of making 7
personal monetary contributions by outside directors a condition
of settlement. Commentators have noted that this tactic may
"trouble some executives so much that they may think twice about
serving on boards," Joann S. Lublin et al., Directors Are Getting
the Jitters: Recent Settlements Tapping Executives' Personal
Assets Put Boardrooms on Edge, Wall St. J., Jan. 13, 2005, at B1,
a development that would not bode well for shareholders in the
long run.

Initial Settlement with the Director Defendants

Following settlement discussions spanning more than twenty
months, the Lead Plaintiff and ten of the twelve Director
Defendants executed a Memorandum of Agreement in May 2004. In
the following months, the Lead Plaintiff reviewed detailed
financial information provided by those ten directors, and the
negotiations between the directors and several insurers that had
issued excess directors and officers insurance policies to
WorldCom (the "Excess Insurers") continued.6 On January 6, 2005,
a settlement was reached between the Lead Plaintiff, the ten
Director Defendants, and the Excess Insurers. The settlement was
for a total of $54 million; notably, the settlement amount
included $18 million paid personally by the settling Director
Defendants, representing more than twenty percent of those
individuals' cumulative net worth, excluding their primary
residences, retirement accounts, and certain joint marital
property.7 The balance of the settlement amount, $36 million,
represented the Excess Insurers' contribution.

An Opinion mandating that the Excess Insurers advance 8
Roberts' defense costs was issued on February 3, 2005. In re
WorldCom, Inc. Sec. Litig., 354 F. Supp. 2d 455 (S.D.N.Y. 2005).

Portions of the January 6 settlement agreement that were
conditioned on the Court's staying the lawsuit brought by
Roberts, a non-settling Director Defendant, against the Excess
Insurers and deferring a decision on Roberts' application for an
order to advance defense costs were rejected by the Court in a
conference on January 11.8 The parties to the settlement
submitted a revised Stipulation of Settlement that omitted those
provisions on January 18 (the "January 18 Stipulation").
The January 18 Stipulation retained a provision known as a
judgment reduction formula (the "Judgment Reduction Formula")
that provided, in essence, that any damages awarded against nonsettling
defendants would be reduced by the greater of the
settlement amount or the proportionate liability of the settling
Director Defendants, as found at trial, adjusted to reflect any
limitation on the financial capability of the settling Director
Defendants to pay. The settlement was conditioned on approval of
the Judgment Reduction Formula, which paralleled a formula that
had received the Court's approval in the WorldCom ERISA
Litigation. See In re WorldCom, Inc. ERISA Litig., 339 F. Supp.
2d 561, 571 (S.D.N.Y. 2004). Several non-settling defendants
objected to the portion of the Judgment Reduction Formula that
took into account settling Director Defendants' ability to pay,
arguing that it violated 15 U.S.C. § 78u-4(f)(7)(B)(I), the
applicable provision of the Private Securities Litigation Reform
Act of 1995 ("PSLRA").

In an Order of February 2, the Court ruled that the Judgment
Reduction Formula in the January 18 Stipulation was impermissible
under the PSLRA. An Opinion of February 10 explained this ruling
in detail; a Corrected Opinion was issued soon thereafter. In re
WorldCom, Inc. Sec. Litig., No. 02 Civ. 3288 (DLC), 2005 WL
335201 (S.D.N.Y. Feb. 14, 2005). That Opinion lamented the fact
that the applicable PSLRA provision rendered it highly unlikely
that plaintiffs bringing Securities Act claims would be willing
to settle with outside directors before reaching settlements with
"deep pockets" such as underwriters. See id. at *14-*15. This
policy concern was well-founded. Soon after the Judgment
Reduction Formula ruling was announced, the Lead Plaintiff
exercised its right to withdraw from the settlement. The
Director Defendants were given until February 25 to file a
pretrial order for the rapidly approaching trial, which was then
scheduled to begin on February 28, 2005.

Summary Judgment Opinion Regarding Andersen

Andersen, which was facing claims under Securities Act
Section 11 and Securities Exchange Act of 1934 ("Exchange Act")
Section 10(b), filed a motion for partial summary judgment on
August 23, 2004. It argued that Lead Plaintiff had failed to
present sufficient evidence that the 1999 WorldCom financial
statements audited by Andersen contained a material misstatement.

In addition, Andersen contended that there was no evidence of
scienter sufficient to support a finding under Section 10(b) that
Andersen certified the 1999, 2000, and 2001 WorldCom financial
statements recklessly or with knowledge that material
misstatements or omissions were present.

A January 18, 2005 Opinion denied summary judgment for
Andersen. It ruled that whether various accounting treatments,
including WorldCom's use of purchase method accounting for its
1998 acquisition of MCI, Inc. ("MCI") and its assignment of a
forty-year lifespan to the MCI goodwill, complied with Generally
Accepted Accounting Principles (GAAP) and thus did not constitute
misstatements, were issues of fact for a jury to decide,
precluding summary judgment on the 1999 financials. See In re
WorldCom, Inc. Sec. Litig., 52 F. Supp. 2d 472, 493-94 (S.D.N.Y.
2005). That Opinion also ruled that issues of fact existed
regarding whether Andersen's audits of WorldCom financials were
so deeply flawed that Andersen acted with reckless disregard and
whether certain "red flags" should have prompted Andersen to
reevaluate its audit plans. See id. at 497-98.

Motions in Limine

On January 7, 2005, motions in limine and the Joint Pretrial
Order were filed by the Lead Plaintiff and various non-settling
defendants. The Lead Plaintiff filed six motions in limine; the
Underwriter Defendants filed eleven, as well as a motion to phase
the trial; Andersen filed eight; Director Defendant Galesi filed
thirty. On February 8, an Order was issued denying the
Underwriter Defendants' motion to phase the trial and providing
preliminary rulings on most of the Lead Plaintiff's and
Underwriter Defendants' motions. Full Opinions regarding most of
the pending motions in limine were issued on February 17. See In
re WorldCom, Inc. Sec. Litig., No. 02 Civ. 3288 (DLC) 2005 WL
375315 (S.D.N.Y. Feb. 17, 2005) (Lead Plaintiff's motions in
limine and Underwriter Defendants' motion to phase the trial); In
re WorldCom, Inc. Sec. Litig., No. 02 Civ. 3288 (DLC) 2005 WL
375314 (S.D.N.Y. Feb. 17, 2005) (Underwriter Defendants); In re
WorldCom, Inc. Sec. Litig., No. 02 Civ. 3288 (DLC) 2005 WL 375313
(S.D.N.Y. Feb. 17, 2005) (Andersen). Several pending motions
were further addressed at pretrial conferences and in later
Opinions. Motions in limine by Galesi were addressed on March 4,
In re WorldCom, Inc. Sec. Litig., No. 02 Civ. 3288 (DLC) 2005 WL
517333 (S.D.N.Y. Mar. 4, 2005), and those brought by other
Director Defendants were decided in a Memorandum Opinion of March
16, 2005.

Significant motions in limine included that of the Lead
Plaintiff to exclude evidence from the plenary trial relating to
individualized issues of the class representatives. The Lead
Plaintiff's motion was granted in an Opinion of February 22. See
In re WorldCom, Inc. Sec. Litig., No. 02 Civ. 3288 (DLC), 2005 WL
408137 (S.D.N.Y. Feb. 22, 2005). Motions brought by both the
Underwriter Defendants and Andersen to preclude Lead Plaintiff's
expert from presenting an aggregate damages calculation to the
jury were denied. See WorldCom, 2005 WL 375314, at *7-*8;
WorldCom, 2005 WL 375313, at *2-*5; In re WorldCom, Inc. Sec.
Litig., No. 02 Civ. 3288 (DLC), 2005 WL 491397 (S.D.N.Y. Mar. 3,
2005). Andersen filed a motion to exclude evidence of the
Restatement, arguing, inter alia, that the Restatement was
irrelevant and based on hearsay. Andersen's motion was denied on
the basis that the Restatement was clearly relevant to, and in
fact highly probative of, the issues being tried. The
Restatement was ruled an admissible business record under Rule
803(6), Fed. R. Evid. See WorldCom, 2005 WL 373313, at *6-*9.
Andersen also moved to preclude evidence of corporate
wrongdoing, including evidence of its indictment in connection
with its role as Enron's auditor and evidence of other litigation
in which Andersen had been involved. An Opinion of March 4 ruled
that references to most other litigation against Andersen would
be barred, but that decision would be deferred on references to
Enron, as the Lead Plaintiff had pointed to evidence that the
Enron scandal directly affected certain decisions made by
WorldCom's management in regard to Andersen. See In re WorldCom,
Inc. Sec. Litig., No. 02 Civ. 3288 (DLC), 2005 WL 578109, at *1-
*2 (S.D.N.Y. Mar. 4, 2005). That Opinion also deferred a ruling
on the Underwriter Defendants' motion to bar evidence of the
spinning of "hot" IPO shares by Salomon Smith Barney ("SSB"), a
co-lead underwriter in the 2000 and 2001 Offerings and one of the
Citigroup Defendants. See id. at *2-*4.

SSB, which was also a lead underwriter for both Offerings, 9
was separately represented and had settled with the Lead
Plaintiff as part of the Citigroup Settlement.

Extension of Trial Date

In October 2004, in light of a two-month delay in the date
of Ebbers' criminal trial, the class action trial date was moved
from January 10, 2005 to February 28, 2005. In a pretrial
conference of February 18, 2005, the trial was rescheduled for
March 17, 2005. The delay was attributable to the Government's
reluctance to allow several "embargoed" witnesses who were
testifying in Ebbers' criminal trial to submit to depositions by
counsel for parties to the class action until the evidentiary
portion of the criminal trial had concluded. See WorldCom, 2004
2591402, at *4.

Underwriters' Settlements

In early February 2005, the Lead Plaintiff commenced
settlement negotiations with BOA and several junior underwriters
who had participated in the 2000 Offering only, and after those
proved successful, opened negotiations with the remaining
Underwriter Defendants. The seventeen Underwriter Defendants had
coordinated their litigation strategy; as trial approached,
however, they procured separate settlement counsel and broke
rank.9 In the period from March 3 through March 16, 2005,
settlements totaling $3,427,306,840 were achieved between the
Lead Plaintiff and each of the Underwriter Defendants (the
"Underwriters' Settlements").

On March 3, the Lead Plaintiff informed the Court that it
had reached a settlement with BOA and Fleet, two Underwriter
Defendants that had combined after their participation in the
2000 and 2001 Offerings, for a total of $460.5 million (the "BOA
Settlement"). Of this amount, 13.61% has been allocated to Class
Members who purchased bonds in the 2000 Offering ("2000
Purchasers"), and 86.39% to those who purchased bonds in the 2001
Offering ("2001 Purchasers"). The Plan of Allocation for the BOA
Settlement and each of the subsequent settlements is based on the
number of bonds the Underwriter Defendant was allocated in each
Offering, as well as the Securities Act Section 11 damages
provision, 15 U.S.C. § 77k(e). The BOA Settlement amount was
calculated using the Citigroup Formula. As already noted, all
Underwriter Defendants had been offered the opportunity to settle
at the Citigroup Formula rate in May 2004, at the time the
Citigroup Settlement was announced.

On March 4, four more settlements were announced (the "March
4 Settlements"): Lehman Bros. settled for $62,713,582, and CSFB,
Goldman Sachs, and UBS Warburg each agreed to pay $12,542,716.
Those defendants participated only in the 2000 Offering, so all
recovery from the March 4 Settlements will go to 2000 Purchasers.

The March 4 Settlements likewise followed the Citigroup Formula.

With two minor exceptions, all of the settlements with the
Underwriter Defendants that followed included a premium over the
Citigroup Formula. The Lead Plaintiff reached settlements with
four more Underwriter Defendants on March 9 (the "March 9
Settlements"): ABN AMRO agreed to pay $278,365,600; Mitsubishi
agreed to pay $75 million; and BNP and Mizuho settled for $37.5
million each. On March 10, Deutsche Bank settled for $325
million; Caboto settled for $37.5 million; and WestLB agreed to
pay $75 million (the "March 10 Settlements"). With the exception
of Deutsche Bank, all defendants involved in the March 9 and
March 10 Settlements participated only in the May 2001 Offering;
recovery from those settlements will thus go only to 2001
Purchasers. Of the Deutsche Bank settlement monies, 4.15% is to
be distributed to 2000 Purchasers, and 95.85% to 2001 Purchasers.

A conference was held on March 9 to address preliminary
approval of the BOA Settlement and the March 4 Settlements.
Preliminary approval was delayed, however, until the Court could
address objections by JP Morgan to the Judgment Reduction Formula
and Bar Order in the BOA Settlement. JP Morgan was a co-lead
underwriter with SSB in both the 2000 and 2001 Offerings. A
March 15 Opinion rejected JP Morgan's objections. In re
WorldCom, Inc. Sec. Litig., No. 02 Civ. 3288 (DLC), 2005 WL
613107 (S.D.N.Y. Mar. 15, 2005). That Opinion performed a
theoretical but detailed calculation of the damages faced by JP
Morgan should it proceed to trial. See id. at *7. All
settlements that had been announced through March 10 received
preliminary approval in a March 16 conference.
The Blaylock and Utendahl Settlements were below the 10
Citigroup Formula.

Some of the Underwriter Defendants participated in only one 11
of the two bond offerings at issue in the case, and, as already
noted, proceeds from those settlements are allocated accordingly.

On March 16, JP Morgan settled for $2 billion. This was
$630 million more than the Lead Plaintiff had been willing to
accept in settlement in May 2004, at the time of the Citigroup
Settlement, and thus represents a significant premium over the
Citigroup Formula. Of the $2 billion sum, 22.75% will go to 2000
Purchasers, and 77.25% to 2001 Purchasers. The same day,
Blaylock and Utendahl agreed to pay $572,840 and $234,000,
respectively.10 The amount recovered from Utendahl will go
entirely to 2001 Purchasers, while 43.02% of the Blaylock monies
will be distributed to 2000 Purchasers and 56.98% to 2001
Purchasers. The final three settlements received preliminary
approval in a March 18 conference.

Because the Underwriter Defendants faced only Securities Act
claims stemming from the 2000 and 2001 Offerings, the amounts
recovered in the Underwriters' Settlements are allocated solely
to those claims.11 Thus, the recovery will go to Class Members
who purchased bonds in the 2000 and 2001 Offerings, not to
purchasers of WorldCom stock or bonds issued prior to those
Offerings. The Underwriters' Settlements, and almost all
settlements in the class action litigation, were achieved with
significant involvement by the Honorable Robert W. Sweet, U.S.
District Judge for the Southern District of New York, and the
The Blaylock and Utendahl Settlements were below the 10
Citigroup Formula.

Some of the Underwriter Defendants participated in only one 11
of the two bond offerings at issue in the case, and, as already
noted, proceeds from those settlements are allocated accordingly.

On March 16, JP Morgan settled for $2 billion. This was
$630 million more than the Lead Plaintiff had been willing to
accept in settlement in May 2004, at the time of the Citigroup
Settlement, and thus represents a significant premium over the
Citigroup Formula. Of the $2 billion sum, 22.75% will go to 2000
Purchasers, and 77.25% to 2001 Purchasers. The same day,
Blaylock and Utendahl agreed to pay $572,840 and $234,000,
respectively.10 The amount recovered from Utendahl will go
entirely to 2001 Purchasers, while 43.02% of the Blaylock monies
will be distributed to 2000 Purchasers and 56.98% to 2001
Purchasers. The final three settlements received preliminary
approval in a March 18 conference.

Because the Underwriter Defendants faced only Securities Act
claims stemming from the 2000 and 2001 Offerings, the amounts
recovered in the Underwriters' Settlements are allocated solely
to those claims.11 Thus, the recovery will go to Class Members
who purchased bonds in the 2000 and 2001 Offerings, not to
purchasers of WorldCom stock or bonds issued prior to those
Offerings. The Underwriters' Settlements, and almost all
settlements in the class action litigation, were achieved with
significant involvement by the Honorable Robert W. Sweet, U.S.
District Judge for the Southern District of New York, and the
settlement -- Galesi in the first instance, and Roberts on March
21. Roberts' personal contribution was $4.5 million, which Lead
Counsel represents to be significantly more than twenty percent
of Roberts' personal net worth, thus representing a premium over
what was obtained from the other directors.
The total amount of the Directors' Settlement is $60.75
million. Of that amount, $24.75 million was paid by the Director
Defendants personally, and $36 million was contributed by the
Excess Insurers. With a prior payment of $15 million, this
contribution is approximately one-half of the available insurance
proceeds. Unlike the January 18 Stipulation to which ten of the
twelve Director Defendants were parties, the March 21 Stipulation
contains a Judgment Reduction Formula that conforms to the PSLRA.

The Directors' Settlement was granted preliminary approval on
March 21, 2005.

The Plan of Allocation for the Directors' Settlement
provides that 80% of the funds are to be allocated to purchasers
of WorldCom stock and other publicly traded debt securities. The
remaining 20% will be distributed to purchasers of bonds in the
2000 and 2001 Offerings. Of this amount, 4.774% will go to
purchasers in the 2000 Offering, and 15.226% to purchasers in the
2001 Offering. The Directors' Settlement also reserved other
funds from the Excess Insurers for the Director Defendants'
defense of the claims pending against them in the various
Individual Actions.

* * *