Feeds

Court waves through Worldcom bankruptcy plan

And with one bound MCI was free

  • alert
  • submit to reddit

Internet Security Threat Report 2014

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

Providing a secure and efficient Helpdesk

More from The Register

next story
Doctor Who's Flatline: Cool monsters, yes, but utterly limp subplots
We know what the Doctor does, stop going on about it already
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
'Cowardly, venomous trolls' threatened with TWO-YEAR sentences for menacing posts
UK government: 'Taking a stand against a baying cyber-mob'
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
The 'fun-nification' of computer education – good idea?
Compulsory code schools, luvvies love it, but what about Maths and Physics?
Ex-US Navy fighter pilot MIT prof: Drones beat humans - I should know
'Missy' Cummings on UAVs, smartcars and dying from boredom
Sysadmin with EBOLA? Gartner's issued advice to debug your biz
Start hoarding cleaning supplies, analyst firm says, and assume your team will scatter
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
prev story

Whitepapers

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.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.