Feeds

Court waves through Worldcom bankruptcy plan

And with one bound MCI was free

  • alert
  • submit to reddit

Top 5 reasons to deploy VMware with Tegile

US telecoms company WorldCom has won court approval for its reorganisation plan and should emerge from bankruptcy in early 2004.

The company, which will officially change its name to MCI after the reorganisation is complete, said that with the plan approved it would be able to turn its attention to driving up revenues and widening its thin profit margins.

"This is a great day for MCI. Against all odds, we have reached our confirmation faster than anyone expected," said Michael Capellas, MCI chairman and CEO, in a statement. "Today's (Friday's) ruling is a real tribute to our 55,000 hardworking employees and our loyal customer base of 20 million strong."

Though experts presumed that the company would eventually come out of bankruptcy, it was thought by many that the process would take far longer. While most large bankruptcies drag on for years, MCI won approval in just 15 months after filing for Chapter 11 protection.

"We have spent the past 10 months building a world-class board of directors, recruiting seven new key executives, including a CFO, a COO, a general counsel and a chief ethics officer, and instituting a standard-setting corporate governance structure," Capellas added. He said that MCI would name three more directors in three week's time, bringing the total to 12 - Capellas and 11 independent outsiders.

Several of the company's former executives were investigated following a major accounting scandal that broke in mid-2002 and the company's former CEO, Bernie Ebbers, still faces criminal charges for allegedly coordinating the $9 billion accounting scandal. Capellas, formerly of Compaq, was made CEO following the company's bankruptcy and the appointment was seen as an attempt to restore confidence and trust to the company.

Once completed, the firm's reorganisation will largely wipe out the holdings of current MCI shareholders and will see the firm issue new stock and notes to current bondholders and other creditors. Other portions of the complex plan will see the firm repay billions of dollars in claims against it. When the company filed for bankruptcy protection, it reported $107 billion in assets and a stunning $41 billion in debts, making the bankruptcy the largest in history.

Though MCI will have just $5.8 billion in long-term debt when it emerges from Chapter 11, industry watchers say that this could be an acquisition target as it begins a slow mark toward wider profit margins. In court filings, the company projected revenue of $24.5 billion and net income of $500 million this year, reaching $25 billion and $D1.2 billion respectively in 2005.

© ENN

Related stories

MCI/Worldcom gets 'ethics' chief
WorldCom 'not guilty' on Oklahoma charges
Oklahoma AG takes aim at WorldCom, Ebbers
MCI 'on track' to exit Chapter 11
SBC claims MCI not paying dues
FBI snoops around MCI
Church group asks FCC to vet MCI
US bars MCI Worldcom from new federal contracts

Internet Security Threat Report 2014

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
DOUBLE BONK: Testy fanbois catch Apple Pay picking pockets
Users wail as tapcash transactions are duplicated
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Google Glassholes are UNDATEABLE – HP exec
You need an emotional connection, says touchy-feely MD... We can do that
YARR! Pirates walk the plank: DMCA magnets sink in Google results
Spaffing copyrighted stuff over the web? No search ranking for you
In the next four weeks, 100 people will decide the future of the web
While America tucks into Thanksgiving turkey, the world will be taking over the net
prev story

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.