Philadelphia, Dec. 18 (Reuters): WorldCom Inc., battered by financial scandals and investigations, on Tuesday announced the resignation of six board members who oversaw the telephone company in the years it racked up more than $ 9 billion in accounting problems that led to its bankruptcy.
The resignations, which included that of former interim chief executive John Sidgmore, came one day after a federal judge approved a contract for WorldCom’s new chairman and CEO Michael Capellas.
The departures, which followed last week’s resignation of another director, leave WorldCom’s board with the three directors appointed in recent months and Capellas, who is seeking to rebuild trust among investors and employees and prevent the flight of customers to rivals.
He was formerly CEO of Compaq Computer and became president and COO of Hewlett-Packard after the two companies merged in May.
“It was absolutely necessary for the old board members to resign. They were there when alleged transgressions happened. Whether they were personally involved or not is really beside the point,” said Danny Golden of law firm Akin Gump Strauss Hauer & Feld, which represents WorldCom’s creditors.
“This was one more step for the company in turning over a new leaf,” said Golden, who expects the creditors and company to name a slate of new board members within a few weeks.
Several of the departing board members had close business and personal ties to former CEO Bernie Ebbers, who left the company in April as its financial and legal woes mounted.