WASHINGTON-Nextel Communications Inc. was awarded the fixed-wireless assets of bankrupt WorldCom Inc. by Bankruptcy Judge Arthur Gonzalez.
Nextel will pay $144 million for the licenses. BellSouth Corp., which originally entered an agreement to buy the licenses for $65 million, will receive a $1.95 million breakup fee.
Gonzalez was forced to hold a hearing on the sale to Nextel after 22 parties objected.
The Federal Communications Commission must still bless the sale of the licenses.
Gonzalez’s decision came on the same day as the Senate Judiciary Committee examined WorldCom’s bankruptcy.
In a hearing where three former attorneys general appeared, WorldCom, which is now doing business as MCI, was harshly criticized by Verizon Communications Inc. and the Communications Workers of America, which want WorldCom to be more severely punished for the $11 billion accounting fraud that led to its downfall.
While WorldCom has reached a settlement with the Securities and Exchange Commission, William Barr, former attorney general and now executive vice president and general counsel for Verizon Communications Inc., said: “They have left this company with virtually all of the fruits of the crime intact.”
The accounting fraud enabled WorldCom to get government contracts because it was able to submit the lowest bid, said Morton Bahr, president of the Communications Workers of America. “MCI was able to low-ball the bids because of the fraud,” he added.
Nicholas Katzenbach, former attorney general and now an independent member of the MCI Telecommunications board of directors, said Verizon’s and CWA’s charges are baseless. “I think the real purpose is to reduce competition.”
The third former attorney general, Richard Thornburgh, is examining WorldCom’s misdeeds, but Thornburgh surprised the hearing when he said it is possible that his final report will be filed after WorldCom/MCI emerges from bankruptcy this fall.
“Recent attempts at scheduling interviews and receiving documents have been frustrating,” said Thornburgh. “We need to have that cooperation stepped up a couple of levels.”
