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WorldCom submits largest bankruptcy filing

WorldCom Inc., the Mississippi phone company that became a dominant player in telecommunications before being felled by an accounting scandal, filed July 21 for bankruptcy protection in the U.S. Bankruptcy Court, making the largest such filing ever.

The parent company of MCI Group listed assets amounting to $107 billion (¥12.5 trillion) in its petition, making its collapse almost twice the size of Enron Corp.'s, whose bankruptcy filing in December 2001 was the largest at that point.

WorldCom did not have enough cash to pay interest on its more than $30 billion (¥3.5 trillion) of debt. Recently, the company missed a $74 million (¥850 million) interest payment.

The company will be able to maintain service to its 20 million residential and business customers, thanks to a new $2 billion (¥234 billion) line of credit, which it effectively secured with the bankruptcy filing, according to WorldCom Chief Executive Officer John W. Sidgmore

He added that the company has enough money to maintain the payroll for its 60,000 workers for at least a year.

"It allows us to catch our breath, put our plan in place, and get money to move forward," Sidgmore said.

Shukan ST: Aug. 2, 2002

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