WorldCom attacked by bondholders

NEWS A group of WorldCom bondholders could take legal action against the telco if it pledges company assets as security on its existing $2.65bn bank loans. WorldCom's banks, including Deutsche Bank and Citigroup, are demanding security on current loans in return for investing new money in the troubled company. But in a letter to WorldCom, a group of investors who jointly hold $8bn in bonds, warned that management should consider its responsibility to all stakeholders and not just lenders. Meanwhile former Worldcom CFO Scott Sullivan has claimed that ex-CEO Bernie Ebbers knew about the financial improprieties months before the scandal broke. It's been reporter that Sullivan told company lawyers that Ebbers was aware that WorldCom was breaking accounting rules by shifting certain expenses between accounts. Ebbers has protested his innocence since the scandal broke, claiming to have been entirely unaware of any wrongdoing while he was at the helm of the company. WorldCom also announced yesterday that it would not pay out a $70m dividend to shareholders of MCI, its consumer long distance unit. WorldCom owes over $30bn in debt and needs at least $3bn in new funding if it is to avoid bankruptcy.