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.
WorldCom, the nation’s No. 2 long-distance carrier and the largest Internet
backbone provider, announced two months later it would
restate its earnings by $3.8 billion.
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.
