The Overall Impact of WorldCom’s Violations
WorldCom’s violations had an impact on so many things. First of all, in the summer of 2002, they were a leading carrier of internet traffic, and then they filed bankruptcy on July 21, 2002. This was the largest bankruptcy in the United States history at that time. WorldCom filed bankruptcy as a result of, accounting errors that totaled over $7 billion, which led to its demise.
The demise of WorldCom had profound effects on an entire industry.
However, between July 2002 when they filed bankruptcy and April 2004 when they began to reestablish the company as MCI, the new CEO Michael Capellas and the newly appointed CFO Robert Blakely still has a problem of trying to settle the company’s debt of about $35 billion. They had to also conduct financial audits of the company. Joseph McCafferty stated, “at the peak of the audit, in late 2003, WorldCom had about 1,500 people …show more content…
This also had an impact of the company’s shareholders, creditors, and other stakeholders. The CNBC news show, “The Big Lie: Inside the Rise and Fraud of WorldCom, “exposed several key participates, including the then-chairman of AT&T and Sprint (Faber, 2003). The “big lie” was promoted through a spreadsheet developed by Tom Stluka, a capacity planner at WorldCom. In reality “Stluka’s model suggested that in the best of all possible worlds Internet traffic would double every 100 days “(Faber, 2003). Stluka concluded this by assigning variables parameters to “whatever we think is appropriate” (Faber, 2003). This also became a problem once it went from an exercise to being a part of corporate strategy. WorldCom continued to through its ethics out the door. As stated in Proverbs 22:1 “A good name is to be chosen rather than great riches, and favor is better than silver or
WorldCom’s violations had an impact on so many things. First of all, in the summer of 2002, they were a leading carrier of internet traffic, and then they filed bankruptcy on July 21, 2002. This was the largest bankruptcy in the United States history at that time. WorldCom filed bankruptcy as a result of, accounting errors that totaled over $7 billion, which led to its demise.
The demise of WorldCom had profound effects on an entire industry.
However, between July 2002 when they filed bankruptcy and April 2004 when they began to reestablish the company as MCI, the new CEO Michael Capellas and the newly appointed CFO Robert Blakely still has a problem of trying to settle the company’s debt of about $35 billion. They had to also conduct financial audits of the company. Joseph McCafferty stated, “at the peak of the audit, in late 2003, WorldCom had about 1,500 people …show more content…
This also had an impact of the company’s shareholders, creditors, and other stakeholders. The CNBC news show, “The Big Lie: Inside the Rise and Fraud of WorldCom, “exposed several key participates, including the then-chairman of AT&T and Sprint (Faber, 2003). The “big lie” was promoted through a spreadsheet developed by Tom Stluka, a capacity planner at WorldCom. In reality “Stluka’s model suggested that in the best of all possible worlds Internet traffic would double every 100 days “(Faber, 2003). Stluka concluded this by assigning variables parameters to “whatever we think is appropriate” (Faber, 2003). This also became a problem once it went from an exercise to being a part of corporate strategy. WorldCom continued to through its ethics out the door. As stated in Proverbs 22:1 “A good name is to be chosen rather than great riches, and favor is better than silver or