WorldCom on Sunday filed Chapter 11 bankruptcy protection in the largest U.S. 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.
"Because we're going to restructure our balance sheet and reduce our debt, we think we can emerge from the Chapter 11 process a stronger and healthier company," WorldCom Chief Executive John Sidgmore said in a telephone interview.
WorldCom, which has 60,000 employees and operations in 65 countries, said it expects to hire a restructuring expert to aid the current management team, and it aims to emerge from Chapter 11 in about nine to 12 months. The bankruptcy does not include its international operations
The company, which has more than 20 million customers and transmits half the world's Internet traffic, said it will have access to up to $2 billion in debtor-in-possession (DIP) funding to keep operating, maintain its network and pay employees under the bankruptcy reorganization.
The Clinton, Miss.-based company plans to appear at the U.S. Bankruptcy Court for the Southern District of New York on Monday to seek approval for the debtor-in-possession funding.
News source: Cnet