Posted on 05/18/2003 3:30:14 PM PDT by Calpernia
PRESS RELEASE
FORMER LONG TIME EMPLOYEE SLAMS WORLDCOM/MCI REORGANIZATION PLAN
Investor Releases His Legal Pleading Filed in the United States Bankruptcy Court
BOWIE, MARYLAND, May 15, 2003 – Richard A. Dahms, an early employee of MCI Communications Corporation, announced today he has filed objections in the United States Bankruptcy Court to the WorldCom re-organization plan. According to Dahms, the re-organization plan fails to address defrauded shareholders.
“WorldCom corporate raiders Bernie Ebbers and Scott Sullivan trashed one of America’s great companies after they acquired number two long distance company MCI – and I’m mad as hell”, said Dahms. “I personally know of people who have lost their entire retirement savings, and do not have a retirement to look forward to after twenty years of service with MCI because of the WorldCom fraud”.
Mississippi based WorldCom, Inc. was an $8 Billion collection of approximately 60 companies when it used its hot stock price in 1998 to acquire the much larger Washington, D.C. based MCI Communications Corporation, a $20 Billion company at the time. WorldCom offered a superior price topping both GTE Corporation and British Telecommunications and paid for the MCI acquisition with “Bernie Bucks” otherwise known as WorldCom stock.
“Embarrassing as it may be to me personally, I am going public by releasing my personal legal filings in the WorldCom bankruptcy matter. I am doing this to raise public awareness of the financial fraud perpetrated by the former management of WorldCom. If the United States Bankruptcy Court allows the current re-organization plan to be adopted, then it will only further erode investor confidence in America and continue to perpetuate the notion that white collar crime in America pays”, said Dahms.
Under the current re-organization plan, current WorldCom shares would be canceled. “I have talked to several people who, like me, did the due diligence on the financials and purchased shares of WorldCom in the spring of 2002 thinking it was undervalued”. Dahms says he divested most of his holdings in his former employer following the WorldCom acquisition of MCI, but purchased $18,605 in stock and call options in May and June, 2002 based on his review of the company’s financial statements. A month later, the massive $9 Billion accounting fraud was disclosed.
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Dahms is requesting a trustee to be named to represent the interests of the defrauded shareholders in WorldCom’s bankruptcy proceeding. “Here we have a case where investors who did the right thing by doing the due diligence only to find out the financial statements they analyzed were completely bogus. The new WorldCom management must amend their re-organization plan to address compensation to the defrauded investor shareholders”.
The United States Bankruptcy code contains a fraud statute. “The new management must modify their re-organization plan to address claims arising from the largest financial fraud in American history”.
Dahms predicts the new WorldCom, renamed MCI, will be a telecommunications powerhouse stripped of much of its WorldCom debt. Already, the company is reporting profits to the United States Bankruptcy Court with cash balances in excess of $2 Billion. Dahms contends the net income being generated while operating in bankruptcy belongs to the current shareholders. Dahms feels management could modify their plan to provide defrauded investors with a piece of MCI’s new future.
“America’s number 2 long distance company has been held hostage by WorldCom’s bankruptcy. When the smokescreen cleared, the only company operating profitably in Bernie Ebbers’ collection of companies was the legacy MCI.” Dahms points out that even if former Chief Financial Officer Scott Sullivan is convicted at his criminal trial later this year and does actual prison time, he has a $20 million water front mansion awaiting him upon his release which he just finished building last year in Boca Raton, Florida. Florida is a homestead state and personal residences cannot be penetrated by lawsuits.
Meanwhile, Dahms recently attended MCI’s 35th anniversary celebration held in Tyson’s Corner, Va. where a large picture of Bernie Ebbers was posted to a dart board.
Richard A. Dahms is the head of The Kavanaugh Group, Inc., a private consulting and investment firm. He was employed by MCI Communications Corporation from 1980 to 1987, and again from 1992 to 1998. The Kavanaugh Group performed consulting services to MCI in 1991 and 1992.
May 15, 2003
Press Release Contact:
Richard A. Dahms
301-262-9232
E-mail richarddahms@comcast.net
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