MCI / WorldCom fraud story

Jeff Bone jbone at deepfile.com
Mon Jul 28 21:04:40 PDT 2003


On Monday, Jul 28, 2003, at 19:23 US/Central, James Rogers wrote:

> Knowing something about the internals of telecom bankruptcies, what 
> happened
> with WCOM is consistent and arguably appropriate.  It is not some evil 
> plot by
> the current administration,

I didn't say it was...  I said it was not surprising "given the 
climate."

> it is judicial SOP for these kinds of situations.

Actually, put on your history glasses.  It hasn't always come down this 
way.  Now, granted, apples / mangoes;  the telecom industry today is 
unlike it's ever been, and there's AFAICR never been anything really 
analogous to this particular situation.

> The US bankruptcy judges (other countries such as the UK operate 
> differently)
> are generally interested in minimizing the overall economic damage of 
> the
> bankruptcy, and because of this some shareholders and creditors get 
> screwed
> because paying them off would create more net economic damage than the 
> economic
> benefit those people would receive.

Sure.  That's the theory.  And in the large, that's IMHO the right 
position for the bankruptcy court to take.  But one has to ask:  in 
this case, was that *really* what happened?

Go check out the bankruptcy docs on the different creditor and 
ownership classes.  Very interesting.

I'm not complaining about losing cash in this one --- hell, I love 
losing bets like this ;-) --- and this isn't a matter of "theory" 
either.  I'm questioning specifically the plan approved by the 
bankruptcy court.

jb



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