[lbo-talk] MCI to pay $500m

Michael Pollak mpollak at panix.com
Wed May 21 02:55:56 PDT 2003


On Mon, 19 May 2003 Nomiprins at aol.com wrote:


> The fine is two-tenths of one percentage point of value lost.

I read that most of the proceeds -- most but not all -- will be "distributed to WorldCom shareholders who lost their investments as a result of this fraud."

So does this mean that investors who bought at the top will get less than 2/10ths of a penny on the dollar? That seems less than pointless.

Trade creditors are now set to receive 30 cents on the dollar. This fine is part of the settlement that will allow MCI to come out of bankruptcy. So it seems all it's doing is taking a little bit from the trade creditors and scattering it to the wind as a sacrificial offering.

In the end it looks like this has no effect on MCI whatsoever. It just takes from the trade creditors and gives to no one. As far as stopping future fraud is concerned, this seems as effective as if we burned a goat to the gods of probity at the corner of Broad and Wall.

Michael



More information about the lbo-talk mailing list