Ebbers 'was made to borrow $400m'

Tims
From James Doran in New York

BERNIE EBBERS, the former chief executive of WorldCom, told a Manhattan Court yesterday that he was made to borrow $400 million from the telecoms group to avoid a collapse of the company’s share price.

Mr Ebbers, who is accused of fraud linked to WorldCom’s record $11 billion bankruptcy in 2002, said that he needed the funds to meet demands from banks that had lent him money for personal investments. Otherwise he would have had to sell some of his WorldCom shares and compounded the company’s collapsing share price. He told Manhattan’s federal court that his indebtedness to WorldCom was “terrible” and that he had not wanted to borrow the money. “They made me,” he said. “I could have sold my stock . . . I would have been glad to do it.”

The court heard that Mr Ebbers, who denies the charges, was forced to watch his billion-dollar fortune collapse as the WorldCom share price sank because his wealth and the company’s finances were inextricably linked.

The court was told that Mr Ebbers was sent reports that showed that more than $2 billion of costs were mysteriously slashed from the bankrupt telecoms company’s books, but that he threw them away without reading them.

http://www.timesonline.co.uk/newspaper/0,,172-1506918,00.html

Think that'll happen this time?

save his ass.

Now, Joe Average . . . that's another story . . .

I don't even think I really want to know the answer to that question...

idiot when it comes to thier quatrerly numbers and how they are derived...be serious.

Amazing, huh?

Golly, but color me skeptical. You know, I just HATE it when folks make me borrow $400 million. If it's not WorldCom driving a truckload of money up to my front door, it's just as likely to be that goddam Loch Ness Monster. And then he wants tree-fitty to drop all that money off!

Delightful juxtaposition of facts in the account: Ebbers' wealth and WorldCom's finances were inextricably linked, but when Ebbers got a report that said that more than $2 billion of costs were taken off WorldCom's book without explanation, Ebbers couldn't be bothered to read the report.

Ebbers was probably entertaining guests when the report came, and you don't just keep the Easter Bunny and the Tooth Fairy waiting, you know.

... but they sort of gloss over the fact that if he was loaned $400 million by WorldCom to pay off loans for personal investments, that meant he lost $400 million on those "personal investments." Otherwise, he could have cashed in some of those "personal investments" to pay off the loans, without having to borrow from WorldCom or sell his WorldCom stock.

So, it's pretty clear that WorldCom was cooking its books to keep its share price high, and that Ebbers was borrowing money from banks on the strength of the purported worth of his WorldCom stock to dabble in risky investments that didn't pay off. Then, when the banks get nervous and want repayment because his collateral worth is slipping, he doesn't have anything with which to repay them.

Whether or not he was induced to borrow the money from WorldCom to keep share prices up is immaterial. He set in motion the events that caused the problem in the first place.

This is going to shoot holes in his defense that he was simply unaware of the company's problems, because it's going to make him look, in a very active sense, incompetent.

You think, maybe, Ken Lay is, at this very moment, "reframing" his "I know nothing" defense based upon what Ebbers is doing to himself?

to work pretty damn hard to lose or even risk $400million, unless, of course, you expected the money tap to just keep on flowing... either way this guy's full of himself. Even a jury of his financial peers would throw away the key....

and get paid millions of dollars a year?

and yet they got paid multi millions to "run" the company. Either way, they defrauded the shareholders.

but does this guy have any relationship to the Ebbers in the Gannon matter?