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Wordcom chapter Original Source Link: (May no longer be active)    http://story.news.yahoo.com/news?tmpl=story&cid=509&u=/ap/20020709/ap_on_bi_ge/worldcom_reorganization_1 http://story.news.yahoo.com/news?tmpl=story&cid=509&u=/ap/20020709/ap_on_bi_ge/worldcom_reorganization_1 WorldCom Considering Reorganization Tue Jul 9, 7:14 PM ET By JOHN PORRETTO, AP Business Writer JACKSON, Miss. (AP) - WorldCom Inc. says it will know within three weeks whether it will pursue what would be the largest corporate bankruptcy filing in U.S. history. Photos AP Photo The Clinton-based long-distance and data services company is on the verge of bankruptcy after disclosing it disguised $3.9 billion of expenses as capital expenditures in a bid to appear more profitable. WorldCom executives clashed with former auditors Arthur Andersen LLP Monday during Congressional hearings over who's to blame for the improprieties, which prompted President Bush ( news - web sites) to propose tougher penalties for company officials who lie on financial statements. As the WorldCom case unfolds, the company continues to negotiate with lenders for $5 billion in critical funding — as it was doing before news of the accounting scandal broke June 25. The company said Tuesday it also was awaiting word from banks on interim financing that could avert a bankruptcy filing — at least for now. Another option is a debt-for-equity swap with bondholders as part of a prepackaged Chapter 11 filing. A company spokeswoman said chief executive John Sidgmore has been contacted by certain bondholders, but no formal discussions have started. "We're fighting for our life," Sidgmore testified Monday before a House panel investigating the debacle, which is under investigation by the Securities and Exchange Commission ( news - web sites) and the Justice Department ( news - web sites). WorldCom has laid off 17,000 of its 80,000 workers, and Sidgmore has said additional layoffs are possible. The company, which has $30 billion in debt, also is looking to sell parts of the business to raise cash. Telecom analyst Pat Comack of Guzman & Co. in Miami said WorldCom's next move — bankruptcy or not — places bondholders and lenders in a tenuous situation. Comack said any new bank loans almost certainly would be secured with collateral, placing those lenders at the top of the creditor's list should a bankruptcy filing eventually occur. On the other hand, he said, a debt-for-equity arrangement would give bondholders — who hold $26 billion in bonds — greater leverage and a better chance of recovering their investment. Without debt, Comack said, a leaner WorldCom could emerge from bankruptcy and possibly survive on its own or become a takeover target. With more than $100 billion in assets reported at the end of March, a WorldCom bankruptcy would be twice as large as Enron's slide into Chapter 11 last fall and four times as big as Global Crossing's in January. The company's shares have plunged from more than $64 in June 1999 to 21 cents Monday.

Acquisitions { August 8 2002 } Cfo indicted { August 28 2002 } Ebbers exchief of worldcom is indicted on federal charges { March 2 2004 } Mci att dispute over calling fraud Misteps since 99 { July 2 2002 } Moving hq name mci { April 15 2003 } Outside directors pay 54 million to settling class action Probe expands { July 1 2002 } Wordcom chapter Worldcom bankruptcy Worldcom bbc { June 27 2002 } Worldcom chief given 25 years for huge fraud { July 14 2005 } Worldcom enabled huge fraud { June 10 2003 } Worldcom msnbc Worldcom ny { June 26 2002 } Worldcom pay 500m fine { May 19 2003 } Worldcom [jpg] Files Listed: 17

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