MCI (the carrier formerly known as WorldCom) is stepping up efforts to recoup the money it's owed by former CEO Bernie Ebbers.
Ebbers, currently on $10 million bail and due in court in November(see Sullivan to Testify Against Ebbers), was due to pay back $408 million he borrowed from the carrier over a five-year period, an agreement reached with MCI when he jumped ship in April 2002.
MCI has recovered about $70 million so far, but it wants the remaining $340 million or so, RIGHT NOW. On Friday, it filed suit in U.S. Bankruptcy Court for the Southern District of New York to get the money back -- and to void Ebbers's prior separation agreement, which gives him a pension worth $1.5 million annually as well as an office and use of the company plane.
Keep in mind, however, that Ebbers was one of the more savvy diversifiers of dotcom shares, which he wisely sold and invested in yachting, timber, and ranches. Turning those assets back into shareholder cash is no easy task.
How's the asset recovery gone so far? The $70 million MCI's gotten from the sale of some of Bernie's assets appears to only scratch the surface of what's there. Below is a handy update on the status of his assets, both past and present, and MCI's efforts to recoup the lost dough.
Here's what MCI's got so far:
Ebbers handed the company, which was leaking more than $100,000 a week, over to WorldCom in late 2002. The carrier offloaded it to another yacht builder, Palmer Johnson Savannah, for $9.8 million in February 2003. After costs, MCI netted about $7 million.
So what about the remaining lucre? How will that be recovered? There are a few other Ebbers investments:
— Ray Le Maistre, International News Editor, Light Reading