Sidgmore To Quit As WorldCom CEO

"I have concluded that having moved WorldCom through the initial phase of the bankruptcy process, now is the appropriate time for the company to initiate a search for a long-term CEO," Sidgmore, who replaced company founder and former CEO Bernie Ebbers in April, said in a statement.

WorldCom, the nation's No. 2 long distance carrier, filed for Chapter 11 bankruptcy protection July 21 after the company reported $3.8 billion in bogus accounting. That figure has since been revised to $7.1 billion. The former telecom giant laid off 17,000 workers in June.

Sidgmore said he intended to return to his former position of vice chairman, and the company said it "remains on track to restructure and emerge from Chapter 11 protection in mid-2003."

The announcement followed a meeting of WorldCom's board of directors to discuss a board member's use of a company plane and whether it was tied to a generous severance given to Ebbers. The board also considered rescinding Ebbers' severance package, according to a report on The Wall Street Journal's Web site Tuesday.

Ebbers' pay package allowed him to pay back a $408 million loan over five years, and at an ultra-low interest rate, starting in 2003 and paid him $1.5 million a year severance. A reversal of those terms could allow creditors to seize Ebbers' assets, the Journal said

Jay L. Westbrook, a professor at the University of Texas School of Law and a member of the National Bankruptcy Conference, said the board might not really be in control of what happens with Ebbers' agreement, because courts and creditors have a lot of say in what happens with a bankrupt company's finances.

"In bankruptcy situation there's a tendency for the board of directors to become dramatically less relevant," Westbrook said.

Also Tuesday, Stuart Pierson, a lawyer for board member Stiles A. Kellett Jr., said his client asked the board for an opportunity to respond to a report by a court-appointed monitor of WorldCom that questioned his client's use of a corporate jet.

"The board asked him to respond on Oct. 3 and we expect him to make that date, but others said he can have more time if he wanted it," Pierson, told The AP Tuesday.

Pierson would not discuss the contents of the report by court monitor Richard Breeden, a former Securities and Exchange Commission chairman. But the Journal said it criticized Kellett's use of a company jet for $1 a month, plus operating costs. The newspaper said jet normally cost up to $1 million annually; Kellett's arrangement was not disclosed at the time in regulatory filings.

Kellett was head of the board's compensation committee, and helped negotiate Ebber's pay package when he was ousted in April.

Prosecutors are seeking to learn whether Kellett's approval of Ebber's loan and severance package was tied to Kellett's use of the jet, the Journal said, citing people familiar with the situation.

As for WorldCom's current leadership, Patrick Comack, an analyst with Guzman and Co. in Miami, said that a change is needed to restore confidence in the company name and that he doesn't think Sidgmore should stay on in any capacity.

"I think most people would like a brand new regime at WorldCom and for current officers to step down, just to make sure anyone involved in the scandal is gone," Comack said.

WorldCom's board of directors and unsecured creditor's committee will lead the search for Sidgmore's replacement.

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