WorldCom

named former

Hewlett-Packard

(HPQ) - Get Report

President Michael Capellas chairman and chief executive, ending a week of speculation about who the bankrupt telecom would choose to lead its turnaround.

Capellas, whose resignation from H-P on Monday caused shares in the computer maker to slump, will replace John Sidgmore, the executive who was appointed CEO in April after founder Bernard Ebbers resigned under pressure. Capellas, known as a strong technology manager whose experience in telecom is limited, was named president of Hewlett-Packard after the company's May purchase of Compaq Computer, where he was CEO.

WorldCom filed for Chapter 11 protection in July after disclosing $3.85 billion in hidden expenses that masked losses in 2001 and the first quarter of this year. It disclosed another $3.33 billion in misstated costs in August and warned of up to $2 billion more this month.

WorldCom said it expects to emerge from Chapter 11 next year.