IN THE NEWS: FORKING IT OVER?

Note to battered WorldCom and Enron investors: don't spend any settlements until you see them. Last week former directors of both firms said they'd reach into their own pockets to settle fraud claims. But their combined $33 million payoffs will net aggrieved shareholders "pennies on the dollar at best," according to Patrick McGurn of Institutional Shareholder Services. Investors say they lost $11 billion in the implosion of WorldCom and more than $60 billion in Enron. These settlements could bump up contributions by former WorldCom CEO Bernie Ebbers and Kenneth Lay and Jeffrey Skilling of Enron, but by the time the lawyers get their typical 20 percent or more and the deals are done, the payoffs will seem trifling.

Are you inspired to sue other companies that done you wrong? Don't rush. Directors rarely pay in cases like this, says Stanford law professor Michael Klausner. And these two may have been the last of the dot-com blowups before regulators tightened the boardroom rules.

IN THE NEWS: FORKING IT OVER? | News