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WorldCom says files for bankruptcy protection
Reuters, 07.21.02, 9:51 PM ET
NEW YORK (Reuters) - WorldCom Inc. , the
No. 2 U.S. long-distance telephone and data services, said
Sunday it filed for Chapter 11 bankruptcy protection from its
creditors, as expected, becoming the largest insolvency in U.S.
history.
The company succumbed to bankruptcy after amassing more
than $30 billion in debt and becoming engulfed in a massive
accounting scandal in which $3.85 billion in expenses were
improperly booked as long-term investments starting in 2001.
The Clinton, Mississippi-based said it had $107 billion in
assets, and $41 billion in debt. WorldCom, which has 85,000
employees and operations in 65 countries, aims to emerge from
Chapter 11 in about nine to 12 months, Chief Executive John
Sidgmore said in an interview earlier on Sunday.
The company expects to hire a restructuring expert within
the next two weeks to aid the current management team and has
arranged for up to $2 billion in debtor-in-possession funding
that would allow it to keep operating, maintain its network and
pay employees under a bankruptcy reorganization, he said.
The Chapter 11 filing by WorldCom would follow once
high-flying companies like energy trader Enron Corp.
and Global Crossing Ltd., which crumbled into
bankruptcy amid a crush of accounting investigations by federal
regulators.
Copyright 2002, Reuters News Service
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