ATHENS - Although Wall Street continues to suffer precipitous declines, University of Georgia accounting professor Dennis Beresford has seen his stock rise.
Telecommunications giant WorldCom Inc. has selected Mr. Beresford to join the company's board of directors and help right the foundering corporation, which last month revealed that it had falsely inflated profits by nearly $4 billion.
On Sunday evening, the company filed a reorganization plan with the Securities and Exchange Commission under Chapter 11 bankruptcy. On Monday, the company announced that Mr. Beresford and former U.S. Attorney General Nicholas Katzenbach were elected to its board of directors.
Some might consider Mr. Beresford's appointment to WorldCom's board a bittersweet assignment, he acknowledged Monday, but he added that another way to view it is as a "wonderful opportunity" to save a "great company."
"I would not have done this if it was just coming in and laying blame - there will be an element to that," said Mr. Beresford, who has no previous ties with WorldCom other than owning some stock several years ago.
"I lost about $10,000 on the investment, but I've already written that off," he quipped in an interview.
In a more serious comment on WorldCom, Mr. Beresford said, "The foundation is there for a very solid company in the future. The positive aspect is obviously salvaging a fine organization ..."
What was evident, Mr. Beresford said, is that WorldCom wanted to emphasize that he and Mr. Katzenbach were coming on the board untainted by WorldCom's previous troubles.
"The thing that was very clear was that the appointment was being made after WorldCom's filing for Chapter 11 bankruptcy," he explained. "They wanted to shield us from any liabilities from the prior situations, but also to make it clear we were coming in with no biases or preconceived notions."
As the new board members, Mr. Beresford and Mr. Katzenbach will oversee a special investigative committee already established by the company to conduct an independent review of WorldCom's accounting practices and how it prepares financial statements.
"We won't be interviewing witnesses, but we will closely oversee the work by a legal firm and follow up with decisions about any necessary action," Mr. Beresford said. "The board decided it would make more sense to have that process managed by brand-new directors not biased by what happened in the past."
Mr. Beresford is Ernst & Young Executive Professor of Accounting at UGA's Terry College of Business and served as chairman of the Financial Accounting Standards Board from 1987 to 1997.
He has written several columns on corporate accounting for the Athens Banner-Herald's business section.
"The board was looking for someone who had particular financial reporting-type experience because of the issues and challenges that have been brought forth and reported by the company," he said.
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