Question Description

Discussion 250 words

Board of directors’ actions

Bernie Ebbers, the CEO ofWorldCom, a major telecommunications company, was having personalfinancial troubles. Ebbers pledged a large stake of his WorldCom stockas security for some personal loans. As the price of WorldCom stocksank, Ebbers’ bankers threatened to sell his stock in order to protecttheir loans. To avoid having his stock sold, Ebbers asked the board ofdirectors of WorldCom to loan him nearly $400 million of corporateassets at 2.5% interest to pay off his bankers. The board agreed to lendhim the money.

Comment on the decision of the board of directors in this situation.

Discussion 250 words Board of directors’ actions Bernie Ebbers, the CEO of WorldCom, a major telecommunications company, was having personal financial troubles. Ebbers pledged a large stake of his WorldCom stock as security for some personal loans. As the price of WorldCom stock sank, Ebbers’ bankers threatened to sell his stock in order to protect their loans. To avoid having his stock sold, Ebbers asked the board of directors of WorldCom to loan him nearly $400 million of corporate assets at 2.5% interest to pay off his bankers. The board agreed to lend him the money. Comment on the decision of the board of directors in this situation.