WorldCom's former top executives fostered a corporate culture that emphasized meeting revenue expectations at any cost, sought to intimidate anyone who questioned their authority, and acted with "virtually no checks" by the board, according to two reports released Monday on the $11 billion accounting scandal and largest bankruptcy in US corporate history. The first report, commissioned by the new board of renamed MCI, pins most of the blame on former executives such as Bernard Ebbers and Scott Sullivan, who awaits trial for fraud. The second report, by former US Attorney General Richard Thornburgh, finds "a broad breakdown of ... internal controls, corporate governance, and individual responsibility." It was prepared for a New York bankruptcy court, and the findings could affect MCI's plan to emerge from Chapter 11 protection this fall, analysts said.
Defense contractor General Dynamics said it plans to buy Veridian Corp. for $1.5 billion in cash and assumed debt. Veridian, based in Arlington, Va., specializes in information technology and security, with 85 percent of its revenues from the Defense Department and intelligence agencies.
An announcement is expected as soon as Wednesday on whether the world's third-largest provider of security systems, Chubb PLC, will agree to a $1.02 billion takeover by US engineering giant United Technologies Corp. Reports said the deal, if OK'd by Chubb's board, also would involve the assumption of $781 million in debt. Chubb, based in Sunbury-on-Thames, England, offers computerized hotel-room locks, closed-circuit TV monitoring, security guards, and fire-protection systems. It is not related to the US insurance company of the same name.
A long-awaited revamp of MCA Records by parent Vivendi Universal will result in the label's virtual disappearance, The Los Angeles Times reported. Universal sent layoff notices to as many as 100 MCA employees, plans to drop many artists from the Santa Monica, Calif., franchise, and will transfer most of those who stay to its Geffen label, the Times said.