CalPERS had asked the high court to review a May 2004 decision by the US 2 nd Circuit Court of Appeals that the pension fund’s state court WorldCom suits could stay in US Bankruptcy Court where they had been moved at WorldCom’s request, Dow Jones reported.
CalPERS, the largest US public pension fund, said it lost more than $550 million when WorldCom, now known as MCI Inc., disclosed a multibillion-dollar accounting scandal in 2002, which led to the company’s bankruptcy and scores of lawsuits. The Golden State’s pension fund had used state court to sue former WorldCom executives such as ex-Chief Executive Officer Bernard Ebbers.
In general, corporations prefer to defend themselves in federal court rather than in state courts, which they consider less predictable and at times more hostile than federal legal venues. Attorneys for those targeted by the CalPERS lawsuits said WorldCom’s federal bankruptcy petition made it possible for the lawsuits to be transferred to a federal court along with all other litigation pending against WorldCom and related parties.