WorldCom FD warned Ebbers over cash shortage
Former WorldCom chief financial officer Scott Sullivan warned ex-chief executive Bernie Ebbers that a 'disaster fourth quarter' meant that the company could not pay its dividend, a court heard yesterday.
In the fraud trial of Ebbers, Sullivan claimed this information was passed to Ebbers two weeks before he assured investors in a television interview that the company would be able to make the payment.
Prosecutors produced a hand-written note in which Sullivan claimed there would be ‘insufficient cash to pay the dividend’, later playing the CNBC interview where Ebbers explicitly stated the dividend was not in danger.
Judge Barbara Jones then suspended the trial, for unexplained reasons, delaying the cross-examination of Sullivan by the defence, who are expected to try and discredit his credibility as a witness.
WorldCom, now called MCI, is on the verge of a £3.5bn takeover by US telecommunications rival Verizon.