What was WorldCom's risk in relation to Mr. Ebbers' personal loans?
A) Ebbers had conflicting business interests with WorldCom
B) Embarrassment if the CEO did not repay his loans
C) Loss of company control through creditor foreclosure on Ebbers' pledged shares
D) The increase in the share price

Question

Quizplus · Accepted Answer

Mr. Ebbers had borrowed a significant amount of money from the company's line of credit and used his WorldCom shares as collateral. If he failed to repay the loans, the creditors could foreclose on his pledged shares, ultimately leading to a loss of company control. This risk was realized when Ebbers couldn't repay his loans, causing him to be forced to sell his shares and leave the company.

What Was WorldCom's Risk in Relation to Mr