Judge green-lights MCI bankruptcy emergence

A federal judge made history earlier this month when he approved MCI's record $750-million settlement of civil fraud charges brought by the U.S. Securities and Exchange Commission (SEC) and removed an obstacle to the company's emergence from Chapter 11 bankruptcy protection.

In U.S. District Judge Jed S. Rakoff's 14-page ruling, he said that giving the company the death penalty was in nobody's best interest and would unfairly penalize its employees. He also said he believed it would help the company back onto the road of good corporate citizenship and he praised MCI for doing an exemplary job of atoning for past mistakes of former leadership.

"The proposed settlement is not only fair and reasonable but as good an outcome as anyone could reasonably expect in these difficult circumstances," said Judge Rakoff's. "The court is aware of no large company accused of fraud that has so completely divorced itself from the misdeeds of the immediate past and undertaken such extraordinary steps to prevent such misdeeds in the future."