WorldCom says to file Chapter 11 bankruptcy Sunday
Reuters, 07.21.02, 6:34 PM ET



PHILADELPHIA, (Reuters) - WorldCom Inc. said it will file Chapter 11 bankruptcy protection later Sunday in the nation's largest insolvency after the long-distance telephone and data services company buckled under a $3.85 billion accounting scandal and a mountain of"junk-rated" debt.

The company said it expects to get up to $2 billion in funding that would allow it to keep operating under a bankruptcy reorganization, WorldCom Chief Executive John Sidgmore said in a telephone interview.

The bankruptcy would not include the company's international operations, Sidgmore said. WorldCom, which has 85,000 employees and operations in 65 countries, aims to emerge from Chapter 11 with a stronger balance sheet in about nine to 12 months.

WorldCom last month disclosed it hid $1.2 billion in losses by failing to report $3.85 billion in expenses and was charged with fraud by the Securities and Exchange Commission. Its accounting debacle followed financial scandals at collapsed energy trader Enron Corp. and sparked outraged from President Bush and Congress.

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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