Just when you think that the worst is over at WorldCon, here comes another does of bad news: SEC is investigating the creditors committee and has subpoenaed members of committee in the bankruptcy case of the former WorldCom. The Wall Street Journal reports that SEC has asked for documents “relating to members’ dealings as well as information they reviewed about WorldCom’s health and prospects, according to documents filed with the U.S. Bankruptcy Court for the Southern District of New York.” The news of investigation first surfaced when “the committee asked for MCI to pay for fees that arise from the SEC probe. MCI on Wednesday responded to that request, saying it shouldn’t have to pick up the tab.” The SEC’s action is unusual. “You’ve got to figure that this is something significant because the SEC is usually so hands-off when it comes to bankruptcy cases,” Bill Rochelle, a bankruptcy lawyer with Fulbright & Jaworski LLP told the Associated Press.
Anyway SEC is also looking for communications between the committee and its advisers, consultants, accountants and WorldCom. These buggers have made off like bandits from the WorldCon bankruptcy. Weil Gotshal & Manges has billed $39.8m for work as chief debtor’s counsel on the MCI bankruptcy. Others roosting on WorldCon miseries include Jenner & Block ($21.7m), and Kirkpatrick & Lockhart ($18m.) In comparison, two accountancy giants KPMG and Deloitte & Touche, which claimed a combined $314.4m in fees. What is more distressing is that SEC is looking for documents relating to company’s business, and financial prospects. I have long suspected that MCI is currently painting a smilie face on a harsh reality. There is still a price war going on in the bandwidth business, the voice market is in a free fall, UNE-P has killed the local business and long distance is dead. What are the prospects for MCI? Ask AT&T. I just am just simply disgusted by this whole system: the small guys are the one who are continuously getting screwed and nobody, and I mean nobody is really doing anything. Bernie Ebbers is still living large somewhere.