Tom Krebs, an attorney for the Alabama pension program, said the ruling by the US 2nd Circuit Court of Appeals will permit the suit, filed in 2002, to go to trial as originally scheduled in front of a state court judge in Montgomery, according to the Associated Press. Alabama’s attorneys wished to get the case to trial quickly because they said they are more likely to recover money in a single suit than as part of a larger joint suit in New York state.
The Retirement Systems of Alabama suit, filed in 2002, contends that due to WorldCom’s bankruptcy in the wake of accounting scandals, the state pension system lost $140 million dollars. It is seeking $420 million in punitive damages beyond restitution of the amount lost.
The suit does not actually name WorldCom as a defendant. Instead, the financial backers and accountants- J.P. Morgan Chase, Morgan Securities, Bank of America, Banc of America Securities, Citigroup, Citigroup Global Markets and Arthur Anderson – are named.
Alabama is one of multiple state-sponsored pension funds that have sued over their WorldCom losses. In April of 2003, Alaska filed suit against WorldCom’s backers to regain its losses (See Alaska Sues Finance Firms Over WorldCom Losses ). Tennessee(See Tennessee Fund Files WorldCom Suit ) and Ohio(See Ohio Will Stay Close to Home With Enron, WorldCom Claims ) have also filed suit to regain losses suffered due to the company’s bankruptcy.