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FREQUENTLY ASKED QUESTIONS
- GENERAL
1. There is a return envelope and cover page included with my
Notice, what are these for?
18. How was the WorldCom
Victim Trust created?
There is a return envelope and cover page included with my Notice, what are
these for? Top I just received / opened the Claims Determination Notice and the 21 day response deadline has passed. What do I do? Top You may still submit a Request for Reconsideration, but we can provide no assurance that your request will be considered. The Distribution Plan provides that a failure to timely request reconsideration of the Claim Determination Notice constitutes a waiver of the claimant’s right to object to or contest the Notice. How will the Distribution Agent determine my recovery? Top The information you were asked to provide in the Proof of Claim Form enables
the Distribution Agent to determine whether you meet the eligibility criteria
for a recovery from the Trust, and if so, what amount you are entitled to
receive.
My CDN does not have a dated postmark, so how do I know when my response is due?
Top You may submit a Request for Reconsideration if you are dissatisfied with the preliminary determination of your eligible recovery. You must submit a Request for Reconsideration for receipt by WorldCom Victim Trust NO LATER than 21 days from the postmark date of this letter (claimants with mailing addresses outside the U.S. have 45 days after the postmark date of this letter). The request may not exceed five (5) double-spaced pages plus exhibits, and must clearly explain the basis of your disagreement with the Notice. The Distribution Agent will review your issues and send you a Final Determination Notice. If you still disagree with the Distribution Agent’s findings, you will have the option to appeal the decision to the U.S. District Court.
What is Eligible Fraud Loss Amount and how did you calculate the
Eligible Fraud Loss Amount in Box 2? Top What is Percentage Fraud Factor? Top
For any given transaction in Eligible Securities, the Claimant’s Economic Loss equals the cost of purchase minus the sale proceeds, if any. Box 1 and Box 2 on page 3 have $0, but I suffered an Economic Loss. Top Economic Loss is indicated only for transactions that are Eligible for a
recovery from the Trust if you have Deficient Transactions and would like to
submit additional information, you may send in a Request for Reconsideration.
Ineligible Transactions do not qualify for a recovery. (See Definition page (ii)
for items underlined). If you supplied the necessary brokerage documentation indicating account owners name and account number printed by the brokerage house but did not provide your Social Security Number, Death Certificate (if applicable) or Claimant Signature, all your transactions will be deficient. Claimants have the opportunity to send in a Request for Reconsideration and provide the missing information to make transactions Eligible. (See Definition page (ii) for items underlined). Will my check equal the amount in the Hypothetical Distribution Box on page 3? Top The Hypothetical Distribution is for illustrative purposes only. The final distribution percentage will be based on the total Eligible Fraud Loss Amount for all claimants, which will not be known until we have completed the processing of all eligible claims. When claims are entered into our system, each claim is assigned a claim number and each purchase or sale transaction within each claim is assigned an entry ID number. The summary of transactions in the letter uses the entry ID numbers to identify each transaction. Why did the purchase and / or sale dates change from the dates I provided on Table A of my Proof of Claim Form? Top Purchase and sale dates may have changed due to two reasons: First, you might have listed the Settlement date rather than the Trade date for the transaction(s) in question. Second, WorldCom distributed a 3:2 stock split on 12/31/99 and distributed shares in an MCI tracking stock spin-off on 6/8/01. For all claimants who participated in the stock split, the shares from the split are to be added to the quantity of the original purchase. The date would remain as the Trade date for the original purchase. Any spin-off shares are assigned the same purchase date as the original purchase of the WorldCom shares. Why is there a date of 1/1/06 or 4/20/04 in the “Sale Date” column, when I never sold my securities? Top Any WorldCom or MCI common stocks (security codes S1-S2 and P1-P3) that were never sold will have a default Sale Date of 1/1/06. All other eligible securities (D1-D27 and P4-P5) that were never sold will have a default Sale Date of 4/20/04. The Eligible Fraud Loss Amount column is blank in my Table A. Top Any transactions that are not completely recorded (e.g., missing purchase date) or documented (e.g., missing brokerage account statement) will NOT have an Eligible Fraud Loss Amount associated with that transaction / Entry ID. In addition, claims that are missing necessary claimant data such as Social Security Number, Death Certificate (if applicable) or Claimant signature will not be eligible for payment and the Eligible Fraud Loss Amount column will be blank for all transactions / Entry ID(s).
Why can't I sign
the claim form on my client's behalf Top If any or all of the transactions listed in Table A are from a tax deferred
account(s) such as an IRA, and the transactions are not indicated as such on
Table A, clearly mark those transactions on Table A and return Table A with a
copy of your brokerage statement indicating the securities were held in a tax
deferred account after June 25, 2002, in the envelope and cover page included
with your Notice to the WorldCom Victim Trust, PO Box 6970 Syracuse, NY 13217 The WorldCom Victim Trust was created as a result of the U.S. Securities and Exchange Commission’s successful enforcement action against WorldCom. The SEC obtained a recovery from WorldCom under the Fair Funds for Investors provisions of the Sarbanes-Oxley Act of 2002 consisting of $500 million in cash and 10 million shares of common stock of reorganized MCI, Inc. The SEC developed a Distribution Plan for the Trust, and U.S. District Judge Jed S. Rakoff of the United States District Court for the Southern District of New York approved the Distribution Plan on July 19, 2004. The Court appointed Richard C. Breeden as Distribution Agent for the Trust. The cash and shares have been deposited into the WorldCom Victim Trust and the Trust proceeds will be distributed to eligible holders of WorldCom’s securities pursuant to the Distribution Plan. Who is eligible for a recovery from the WorldCom Victim Trust? Top Click here for a summary of key eligibility requirements.
What securities/transactions are eligible for a recovery? Top
Click here for a list of all securities that are eligible for recovery. I am an employee or former employee of WorldCom who received grants of stock options. Are stock options Eligible Securities? TopNo. Stock options are not Eligible Securities. However, if you exercised stock options and acquired common stock (i.e. WorldCom Group common stock or MCI Group common stock), then any losses incurred on the common stock acquired may be eligible for recovery. I received WorldCom stock in the WorldCom-MCI merger. Am I eligible to recover my losses on this stock? Top No. The merger of WorldCom and MCI occurred on September 14, 1998. Because this transaction occurred before the beginning of the Fraud Period, losses incurred on stock obtained in the merger are not eligible for recovery from the Trust. However, if you sold stock during the Fraud Period that you acquired in the merger, you must record this transaction (both the purchase and sale side of the transaction) in Table A of the Proof of Claim Form for the purpose of determining whether you incurred an aggregate net loss from your purchases or sales of Eligible Securities during the Fraud Period.
What transactions should I list in Table A of the Proof of Claim Form? Top In Table A, enter all transactions to purchase or sell Eligible Securities that occurred during the Fraud Period (i.e. between April 29, 1999 and June 25, 2002). A separate line should be used for each purchase of a particular Eligible Security and the corresponding sale of that Eligible Security. It is not necessary that both the purchase and the sale occurred during the Fraud Period. For example, if you purchased 100 shares of WorldCom stock on April 1, 1999 (before the beginning of the Fraud Period), and sold those shares on February 1, 2001 (during the Fraud Period), you should record this transaction in Table A. If you engaged in numerous purchase and sale transactions involving Eligible Securities, you should list in Table A every transaction in which either the purchase or sale side of the transaction occurred during the Fraud Period. Specifically, you should list in Table A all of your transactions in Eligible Securities that you:
Note that you will not necessarily qualify for a recovery of losses suffered in all transactions listed in Table A. The information provided in Table A will enable the Distribution Agent to determine whether you suffered an aggregate net loss from all of your transactions in Eligible Securities during the Fraud Period. If so, and assuming that you satisfy all other eligibility criteria, you will be eligible only to recover a portion of the losses you suffered from Eligible Securities that you purchased on or after April 29, 1999 and still owned as of the close of trading on June 25, 2002.
What sales price should I enter in Table A of the Proof of Claim Form for an Eligible Security that I never sold? Top
For Eligible Securities that you purchased during the Fraud Period and that you never sold, you should list “None” as the Sale Date and insert a Sale Price in column (e) equal to the distribution you received or will receive from WorldCom’s bankruptcy estate. Distributions of new notes of MCI should be reported at face value, and distributions of shares of new common stock of MCI should be valued at $25.00 per share, pursuant to the terms of WorldCom’s reorganization plan. If the security is either WorldCom common stock (WCOM) or MCI common stock (MCI), enter a Sale Price of $0.00 in column (e), since holders of these classes of securities obtained no recovery from the WorldCom bankruptcy estate.
Why do I need to list the brokerage accounts where I held Eligible Securities? Top The brokerage account information you provide in the Proof of Claim Form is required for claim verification purposes. It is not necessary to list all brokerage accounts in which you at any time held Eligible Securities—list only those accounts in which you held Eligible Securities on June 25, 2002.
I
received WorldCom group common stock and MCI group common stock as a result of
the WorldCom spinoff in June 2001. How
do I record these shares on Table A of the Proof of Claim Form?
Top On June 8, 2001, WorldCom issued two tracking stocks, WorldCom group common stock and MCI group common stock. These two tracking stocks were issued to existing holders of WorldCom stock in the following manner: for every 1 share of WorldCom stock, holders received 1 share of WorldCom group common stock and 1/25th of a share of MCI group common stock. If you received WorldCom group common stock and MCI group common stock as a result of this spinoff transaction, you should treat the acquisition date and cost of these shares in Table A of the Proof of Claim Form as follows: Date Acquired is your original date of purchase of WorldCom stock you surrendered in exchange for the shares of tracking stock. The Date Acquired is NOT the date of the spinoff, June 8, 2001, even though that is the date that WorldCom group common stock and MCI group common stock were distributed to existing shareholders. Cost is the original purchase price you paid for the shares of WorldCom stock you exchanged for WorldCom group common stock and MCI group common stock. Of this original cost, 96.11% should be allocated to WorldCom group common stock and 3.89% should be allocated to MCI group common stock in your entries on Table A. Example: Investor purchased 100 shares of WorldCom stock on January 15, 2001 for a total cost of $5,000 (this is a hypothetical amount. The actual stock price on 1/15/01 may have been different than $50 per share). As a result of the June 8, 2001 spinoff, Investor received 100 shares of WorldCom group common stock and 4 shares of MCI group common stock. On Table A of the Proof of Claim Form, Investor should list the purchase of 100 shares of WorldCom group common stock with an acquisition date of January 15, 2001 and a cost of $4,805.50 ($5,000 x 96.11%). Investor should also list, on a separate line in Table A, 4 shares of MCI group common stock with an acquisition date of January 15, 2001 and a cost of $194.50 ($5,000 x 3.89%). If Investor subsequently sold the MCI group common stock and the WorldCom group common stock, Investor should list the sale date and sale price separately for each security.
WorldCom
common stock split 3 for 2 on December 31, 1999.
How do I account for this stock split for shares that I owned prior to
December 31, 1999 on Table A of the Proof of Claim Form?
For purposes of Table A on the Proof of Claim Form, the Date Acquired is your original date of purchase of WorldCom stock and your cost is the original purchase price you paid for the shares of WorldCom stock. Neither the acquisition date nor the total purchase price of WorldCom common stock you owned prior to December 31, 1999 will be affected by the 3 for 2 stock split. NOTE: The stock split would have affected your per share cost basis, but your total cost would not have changed. Example: Investor purchased 100 shares of WorldCom common stock on June 1, 1999 for a total purchase price of $ 5,000 (this is a hypothetical amount. The actual stock price on 6/1/99 may have been different than $ 50 per share). As a result of the 3 for 2 stock split on December 31, 1999, Investor's share count increased from 100 to 150 shares. Investor sold all 150 shares on July 1, 2000. On Table A, Investor should list the purchase of 150 shares of WorldCom common stock with an acquisition date of June 1, 1999, a cost of $ 5,000, and a sale date of July 1, 2000. NOTE: The issuance of 50 additional shares to Investor on December 31, 1999 does not constitute a separate purchase.
For
which securities did holders receive a recovery in WorldCom’s bankruptcy
proceeding in an amount greater than 35.7% of their claim?
Am I eligible for a recovery from the Trust with respect to these
securities? Holders of the following securities recovered more than 35.7% of their claim in WorldCom’s bankruptcy reorganization proceeding. If you held one of these securities and recovered more than 35.7% of your claim through the bankruptcy process, you are not eligible for a recovery on that security. MCI Capital I 8.00% Cumulative Quarterly Income Preferred Securities, Series
A
I
owned bonds that are not included on the list of Eligible Securities. Am I eligible for a recovery on these bonds? You are only eligible for a recovery from the Trust for Eligible Securities listed in the Proof of Claim Form (if you meet the other eligibility requirements). Two bonds in particular that are not Eligible Securities are: WCOM Dealer Remarketable Securities (1/15/2011 maturity; 7.375% interest rate; CUSIP 98157DAF3) WCOM Notes Due 2006 (1/15/06 maturity; 7.375% interest
rate; CUSIP 98157DAG1)
If I apply for a recovery from the Trust, am I waiving any rights to pursue separate litigation against WorldCom or its former officers and directors? May I participate in other litigation (i.e. class action lawsuits) and recover from those lawsuits as well? Top You will not waive any rights to pursue litigation against WorldCom or its former officers and directors if you file a Proof of Claim Form. And yes, you may participate in other litigation and potentially obtain a recovery through settlements or judgments in other lawsuits. The SEC settlement amount that funded the WorldCom Victim Trust relates only to the SEC’s enforcement action against WorldCom. Why do I need to provide copies of my brokerage statements or trade confirmations? Do I need to send in all my brokerage statements? What if I did not retain copies of my trading records? Top The Distribution Plan requires that claimants provide copies of documents that substantiate the transactions listed in the Proof of Claim Form. You must provide genuine and sufficient supporting documentation to verify the terms of each transaction recorded in Table A. In addition, you must submit genuine and sufficient documentation to verify your holdings in Eligible Securities as of the close of trading at the end of the Fraud Period on June 25, 2002. This documentation may include: (i) photocopies of monthly stock brokerage or other investment account statements (reflecting your opening and closing balances for the months and transactions specified on the Proof of Claim Form); (ii) trade confirmation slips provided by your stockbroker or other broker-dealer; (iii) schedules attached to income tax filings; or (iv) signed letters from brokers, on their firm’s letterhead, providing all of the information that would be found on a confirmation slip. If such documents are not in your possession, please obtain copies or equivalent contemporaneous documents from your broker or tax advisor. Failure to supply this information could result in a rejection of your claim. DO NOT submit originals of your supporting documentation. Copies will suffice. Supporting materials will not be returned to you, so you should retain the originals for your records. Do not send original stock certificates or bonds/debentures. How much will I recover from the Trust? When will I find out how much I recover? TopIt is impossible to estimate the amount any claimant will recover from the Trust prior to the receipt and processing of all Proof of Claims Forms from all claimants. The amount of your recovery for each transaction in Eligible Securities will depend, among other things, on (1) which Eligible Securities you purchased, (2) the price you paid for the Eligible Securities, and (3) the date on which you purchased the Eligible Securities. After the submission of all Proof of Claims Forms by the Claims Bar Date (September 12, 2005), the Distribution Agent will review and analyze each claim and determine the aggregate amount of approved claims from all claimants. By the end of March 2006, you will receive a Claims Determination Notice from the Distribution Agent which will detail the transactions you submitted and the eligible loss that has been determined and approved.
You will find additional information about the WorldCom Victim Trust in the Distribution Plan and Distribution Plan Notice, both of which are available in the downloads section of this website. You may also obtain information regarding the claim process from the Trust’s hotline at 866-894-8871. |
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