NEW YORK (CNN/Money) -
A lot has happened on the WorldCom front since last week's column, where I argued that WorldCom should not be allowed to come out of bankruptcy just yet. The column generated a fair amount of reader feedback (More about that in a bit.)
On Tuesday, things took a turn for the better as the court-appointed monitor said in a report that WorldCom, which intends to be known as MCI if it comes out of bankruptcy, has taken several positive steps to improve its corporate governance.
The monitor, former Securities and Exchange Commission Chairman Richard Breeden, added that recent allegations of fraud by rival phone companies should not hinder the company's chances of exiting bankruptcy.
But just when WorldCom thought it was safe to get out of bankruptcy, the state attorney general of Ohhhh-klahoma, where the wind comes sweepin' down the plain -- sorry, those Rodgers and Hammerstein show tunes are just so infectious -- filed criminal charges against WorldCom and former CEO Bernie Ebbers Wednesday morning.
Don't let WorldCom emerge say some....
So what now? That's where you come in. I wrote last week that the U.S. bankruptcy judge in charge of the case, Arthur Gonzalez, should not green-light the company's reorganization plan when the court meets Sept. 8.
Several readers agreed. "Right on regarding WorldCom, a rogue corporation being propped up by Wall Street interests," wrote John Corr.
Carl Nocera wrote in to say that, "Dishonesty and incompetence should not be rewarded."
| The latest on WorldCom
|
|
|
|
|
And reader Kathleen Rogers said that the telecom landscape would not be negatively affected by the loss of WorldCom. "We don't need WorldCom for competition in the telecom long-distance business. That charge is laughable," she wrote.
Now don't get me wrong. I still think it's premature to say that WorldCom should be dissolved. My point (and I'm sticking to it) was that it would not be wise for Gonzalez to approve a bankruptcy plan just yet given all the legal issues that still cloud the company.
In addition to the concerns already mentioned, the state of Oregon announced last week it was suing former WorldCom officers and several underwriters of the company's bonds for fraud.
but what about all the employees, counter others
Of course, there were several defenders of WorldCom. Some employees wrote in to disagree with me.
"Your article stating that WorldCom shouldn't be allowed to emerge from bankruptcy fails to take into account one thing, that if you liquidate a company like WorldCom you cost 55,000 employees their jobs. People like me who have spent 13 years of my life trying to build a career. People who haven't done anything wrong and who were lied to just like everyone else," wrote one WorldCom worker.
Obviously, I don't wish to see people lose their jobs. Once again, my point was not to say that WorldCom should immediately be liquidated.
But if investigators find that WorldCom still is committing fraud, it would be wrong to let it come out of bankruptcy in a better competitive position (i.e. a lower debt load) than it was before. A new round of price wars initiated by WorldCom could further cripple the telecom industry, which could lead to another big round of job cuts industry-wide.
| Recently in Tech Biz
|
|
|
|
|
|
Another employee argued that the allegations made by Verizon, SBC and AT&T about WorldCom improperly routing calls to avoid access fees are just sour grapes.
"Do you really believe all of the accusations that the competition is squawking about? They're pissed that MCI is coming out of bankruptcy with virtually no debt. Who wants to compete against that? Should MCI actually be permanently put out of business for the action of a few? I don't think so."
It's a great point....which is why I said originally that if the routing charges turn out to be untrue, then WorldCom deserves a clean slate. But it is highly doubtful that any investigation into these issues will be done by Sept. 8.
Finally, there also were some who thought that the only reason I wrote such a negative column about WorldCom was that I had to be on the take.
"Who's paying you......Verizon?" asked one reader (with an MCI e-mail address). And another (also with an MCI address) wrote, "Are you receiving contributions from Verizon, Paul?"
Well, Verizon is my local phone provider and I am pretty happy that they recently lowered their DSL prices. But seriously, there is nothing true to that absurd allegation. And before you e-mail me to accuse me of having other ulterior motives, the only stock I own is that of my employer, AOL Time Warner, through my 401(k) plan.
I have about as much conflict of interest here as Judge Gonzalez, who dodged a possible bullet Tuesday by disclosing that he sold off a stake in AT&T in January.
Hizzoner owned a whopping 4 shares and netted, after fees, the grand total of $17.61.
Sign up to receive the Tech Biz column by e-mail.
Plus, see more tech commentary and get the latest tech news.
|
