stop the presses...
WorldCom to File Chapter 11 Sunday
07/21/2002 18:03:28 EST
NEW YORK (AP) - WorldCom Inc. will file for Chapter 11 bankruptcy protection Sunday, the embattled telecommunications company's chief executive John Sidgmore told The Associated Press.
Sidgmore said the filing would take place in the U.S. Bankruptcy Court in Manhattan.
"The first priority was to stabilize the company financially," he said, referring to the receipt of approximately $2 billion in debtor in possession financing. "We don't think that there will be any significant impact on the employees and vendors, for that matter, and we should have plenty of cash to make it."
Sidgmore said the company will look at selling some of its noncore assets, and that "potentially includes some of our Latin American facilities" and wireless resale business. "Certainly not UUNet or MCI or any of the core assets."
WorldCom admitted June 25 that it falsely accounted for $3.85 billion in expenses, which had the effect of inflating profits. That same day, it fired chief financial officer Scott Sullivan, who was subsequently accused by the company's auditor, Arthur Andersen, of withholding crucial information about WorldCom's bookkeeping.
WorldCom also announced that it would lay off 17,000 workers, or 20 percent of its global work force.
Even before the hidden expenses were exposed, WorldCom was engulfed in financial turmoil.
WorldCom's stock price traded as high as $64.50 in June 1999. However, shares of WorldCom and other telecommunications companies have slid ever since as the dot-com bubble burst and other market forces caused an industrywide implosion. |
