WorldCom may file for bankruptcy next week

Reuters via IDG.net ^ | 7/18/02

[GeneD]

PHILADELPHIA (REUTERS) - WorldCom Inc., the long-distance telephone and data services company buckling under a $3.85 billion accounting scandal and a mountain of "junk-rated" debt, may file for bankruptcy protection as early as next week, sources familiar with the situation said on Thursday.

A WorldCom spokesperson could not be immediately reached for comment. A bankruptcy filing by WorldCom, which has $104 billion in assets, would eclipse the Chapter 11 filing by collapsed energy trader Enron Corp. as the nation's largest insolvency.

The Clinton, Mississippi-based company has lined up about $2 billion in funding that would allow it to keep operating under a bankruptcy reorganization, sources familiar with the situation told Reuters earlier this week.

Citigroup Inc., J.P. Morgan Chase & Co. and General Electric Co.'s GE Capital financing arm will provide the so-called debtor-in-possession (DIP) funding, which will be backed by the value of WorldCom's high-speed Internet network and other assets, those sources said.

WorldCom last month disclosed it hid $1.2 billion in losses by failing to report $3.85 billion in expenses. The company fired its former chief financial officer, Scott Sullivan, who it alleged orchestrated the accounting debacle. Its former chief executive Bernie Ebbers resigned under pressure in April.

[aSkeptic]

The Clinton , Mississippi-based company has lined up about $2 billion in funding that would allow it to keep operating under a bankruptcy reorganization, sources familiar with the situation told Reuters earlier this week.

-- /sarcasm /bitter irony

[Democratic_Machiavelli]

"Another one bites the dust
(and another one gone
and another one gone)"

-Queen

[Mr. Jeeves]

Now batting, Left Fielder, Number 666, America Online.

[pittsburgh gop guy]

Oh, forgive me. I thought they already had filed for bankruptcy.

[ken5050]

I'll believe the bottom has been reached when Amazon goes belly up...

[Non-Sequitur]

If WorldCom has $104 billion in assets then I think that Anderson is still cooking the books. Maybe a 10th of that is what they would actually have.

[ken5050]

You can buy a share of Worldcom and a share of Salon for about the same price......hey, that;s it..maybe they should merge...heck..Salon has content, and Worldcom has distribution, right?..It's a perfect fit.....now, they can pay me my $10,000,000 investment advisory fee.....( in CASH, not stock)

[jumpstartme]

So the banks got WCOM to agree to the secured loans, huh? Why not another round of unsecured loans? I thought they liked throwing money away.