The end of Ebbers empire
Published 10:32 pm Saturday, April 26, 2008
Bernie Ebbers’ majority stake in KLLM Transport Services Inc., a Richland trucking company, and the Brookhaven Country Club have been sold as part of a lawsuit settlement stemming from the accounting scandal that wrecked WorldCom Inc.
The assets have been liquidated for more than $70 million, but some reimbursements may be on hold until several pending lawsuits are resolved, said Bill Brandt, president and CEO of Development Specialists Inc., a Chicago company that oversees the trust.
Brandt said the federal court originally expected Ebbers’ items to return $15 million to $40 million.
A trust set up to distribute proceeds from the assets’ sale has paid $45 million thus far, primarily to the suit’s main plaintiffs, the state of New York and MCI, Brandt said.
Ebbers was convicted of fraud and conspiracy in March 2005 for his role in the $11 billion WorldCom scandal. He is in a federal prison in Oakdale, La.
As part of the class action lawsuit settlement, Ebbers agreed to turn over all assets except enough money to buy a home for his wife, Kristie, who this week filed a petition for divorce, and an allowance for her. Ebbers also was allowed to keep enough money to pay his attorneys.
In March, the trust completed a sale of KLLM to a group of Jackson investors. Brandt wouldn’t identify the buyers or the sale prices.
“We’re certainly glad that’s behind us,” said KLLM President and CEO Jim Richards. “The company is here to stay.”
KLLM recently sold a line of vans it bought in 1995 and will focus on its core business of climate-controlled trucking, Richards said.
He said the company, which employs 1,700 people nationwide, did not have to eliminate any jobs or scale back its business while the sale was pending.
Jeff Wilson, a former car dealership owner in Brookhaven, bought Brookhaven Country Club last year.
He said he’s spent about $100,000 since then making improvements to the club’s course and facilities.
“The grounds and facilities had gotten in pretty bad shape,” Wilson said.
Updates include remodeling the clubhouse, reopening the restaurant and freshening the course. An area is being rented out for weddings, business meetings and club functions.
Ebbers made six or seven personal loans totaling $9 million to $10 million to WorldCom colleagues in the late 1990s and early this decade, before the company’s much-publicized $11 billion accounting fraud scandal, Brandt said.
He said the trust has sued to collect funds Ebbers lent colleagues before the company’s collapse. The colleagues used those loans, as much as six figures each, toward business ventures and other opportunities not related to WorldCom, he said.
A judge will have to resolve what happens to some of the money, he said.