WorldCom Reorganization Plans Include Less Debt, New Name

By Agence France-Presse WorldCom Inc., shaking off one of the biggest accounting scandals in history, filed plans April 14 to emerge from bankruptcy with a new name and vastly reduced debt. WorldCom said it had secured backing from 90% of its creditors for a reorganization plan to emerge from Chapter 11 bankruptcy. Under the filing with a New York bankruptcy court, WorldCom said it would emerge with pared-down debt of between $3.5 billion and $4.5 billion. When it filed for bankruptcy last July, WorldCom listed debts of $41 billion. WorldCom said it also would abandon its scandal-tainted name. It planned instead to assume the name of MCI, the rival telecoms firm that it swallowed in 1998. It also announced it would move it headquarters to Ashburn, Va. WorldCom said it would launch a global multimedia blitz immediately, supporting a three-year plan to become a leader in combined local, long-distance and data telecoms services. The firm also announced the appointment of Robert Blakely as its new chief financial officer. Blakely formerly held that post at Tenneco Inc. and Lyondell Chemical. Former comptroller David Myers and chief financial officer Scott Sullivan were fired in June of 2002 after WorldCom revealed it had an unprecedented $3.8 billion of accounting discrepancies. That figure was later revised upwards. WorldCom has said it may end up with revenue restatements totaling more than $9 billion. It has already restated $7.68 billion in questionable accounting figures. Copyright Agence France-Presse, 2003