A bit of WorldCom trivia. WorldCom, Inc., originally known as LDDS Communications, Inc, (“LDDS”), went public in 1989 via a reverse merger with Advantage Companies, Inc. The stock of the newly public company was then used as a currency to acquire other entities.
Bernard Ebbers had become the company’s Chief Executive Officer in 1995. While I have not been able to find any of the specific details pertaining to the actual transaction, Dick Thornburgh, the Bankruptcy Court Examiner for the WorldCom Chapter 11 filing, had the following disclosure in his “First Interim Report” to the Bankruptcy Court:
news.findlaw.com
In August 1989, LDDS became a public company through a reverse merger with Advantage Companies, Inc. (“Advantage”), a long distance reseller base in Atlanta, Georgia, whose common stock was then listed on the Nasdaq National Market System. LDDS merged into Advantage through a stock conversion with no payment of cash. The surviving entity changed its name to LDDS. The Chairman of the Board of Advantage, Stiles A. Kellet, Jr., became a member of the Board of Directors of LDDS following the merger. Mr. Kellet remained on the Board of Directors of WorldCom through the time of the bankruptcy filings. He resigned from the Board on October 27, 2002.
At the time of the merger with Advantage, LDDS claimed combined pro forma annual revenues for the merged companies of approximately $116 million. |
