Ebbers in multi-million dollar tax break
Bernie Ebbers, the charismatic former head of WorldCom, could benefit from a huge multi-million dollar tax break.
According to the Financial Times, Ebbers made a donation to Mississippi College that was financed by loans he received from WorldCom when he was CEO. It involved Ebbers guaranteeing a letter of credit on bond issues from the school he graduated from.
While the bonds were guaranteed using his stock as collateral, this was replaced by $36.5m in cash by WorldCom, when the stock price fell.
Although the tax benefit can only be realised once the bonds mature, Ebbers has made a request to the Bank of America that they be paid earlier than planned. This, according to the FT, could be as early as February.