WorldCom Chief To Resign
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WorldCom CEO and President John Sidgmore stepped down late Tuesday, ending what could be one of the roughest six months tenures at the helm of a corporate giant.
The bankrupt telecom said Sidgmore would retain his position until a successor is found. Sidgmore will then return to his role as vice chairman, which he held until he became CEO and president in April, when WorldCom's accounting shenanigans came to light.
"I have concluded that having moved WorldCom through the initial phase of the bankruptcy process now is the appropriate time for the company to initiate a search for a long-term CEO," Sidgmore said in a statement. "By returning to my vice chairman role, after the search is complete, I along with [WorldCom Chairman] Bert Roberts will be able to remain active in a strategic capacity while our new CEO manages the day-to-day operations of the company and the overall bankruptcy process."
Sidgmore was charged with a difficult task as WorldCom's chief executive, taking over from the company's founder, Bernie Ebbers, who left the company under a cloud of controversy arising from $366 million in loans and loan guarantees extended to him by the company to cover his portfolio shortfall from WorldCom's falling share price.
In a press conference following the disclosure, Sidgmore sought to save the company by pinning the blame for the accounting gimmickry on two former WorldCom executives, CFO Scott Sullivan and Comptroller David Myers, while stressing that WorldCom was too big to fail.
However, events quickly overwhelmed the company. The restatement started a chain of events that nearly doubled the restatement, collapsed the company's stock, ignited investigations from Congress to the Justice Department, and eventually pushed the company into the largest corporate bankruptcy filing in U.S. history on July 21.
Despite WorldCom's pledge to concentrate on restructuring its business, the company remains mired in the controversies of the past. According to a report in The Wall Street Journal, WorldCom's board has looked into the possibility of reclaiming the lucrative severance package given to Ebbers.
Meanwhile, the Journal said a monitor appointed by the bankruptcy court criticized director Stiles Kellett Jr. for using a WorldCom jet for just $1 a month plus operating costs.
WorldCom reiterated that it planned to emerge from Chapter 11 protection by the middle of next year.