A leading investor of WorldCom is said to want former New York mayor Mr Rudolph Giuliani to be named the company's chairman, The Wall Street Journalreported today.
The investor, Mr David Matlin, has started a fund with Mr Giuliani to accumulate at least one-third of WorldCom's bonds. Matlin's group of investors could retain the right to appoint board members if it owns more than a third of the company's bonds.
Sources close to the situation told the WSJthat Mr Matlin, who heads a bond-investor group backed by Credit Suisse First Boston, is expected to urge US bankruptcy Judge Arthur Gonzalez to accept a reorganization plan under which Mr Giuliani would become chairman.
WorldCom, the telecommunications giant, admitted a $9 billion accounting fraud earlier this year and is mired in the biggest bankruptcy in US history.
Mr Michael Capellas, who was appointed chairman, chief executive and president on Friday agreed to join WorldCom after winning the approval of its committee of official creditors. Mr Matlin, believed to be WorldCom's largest creditor, is not a member of the committee and has not expressed complete confidence in the hiring of Mr Capellas.
Mr Capellas said he wanted to meet with the former mayor, who founded a consulting company to advise companies on risk management.
"What's not to like? He's 'Man of the Year,'" Mr Capellas said. "We are going to see if there is a role for Giuliani. We are moving forward and assembling a world-class board."
AP