Law Firm Can't Keep $14.2 Million Dollar Fee

WorldCom settled a claim brought by the State of Mississippi with respect to delinquent tax liability for 100 million dollars. The company also paid 4.2 million to a private charity and 42.2 million to the private law firm that had represented the State. On request from the State Auditor, the private charity turned the money over to the State; the law firm refused to do so.

The Mississippi Supreme Court reversed the grant of summary judgment to the firm firm, holding that, when the Attorney General pays special assistants, they must be paid from the AG's contingency fund or from other funds approved by the AG's office. Further, public funds (such as the court holds these payments were) must be paid into the state reasury.

Neither requirement was met in the case. (Mike Frisch)