WorldCom Seeks Bankruptcy Protection
In Mondays press conference in New York, Sidgmore said the company filed for bankruptcy in order to secure the debtor-in-possession financing it has arranged. Sidgmore said he hopes the bankruptcy court approves the new financing today. "I regret that we are in the position we are in today," Sidgmore said. "We fought hard and frantically to avoid this.""The debt had become over the last couple years the enemy of our company, had threatened our viability and drove our stock price down to nearly a dollar," Sidgmore said. "These accounting problems unfortunately reduced the options that were available to us on the refinancing front." Despite Sidgmores recent protestations that bankruptcy was not the "preferred" path for WorldCom, the Clinton, Miss. carrier filed its petition in the U.S. bankruptcy Court for the Southern District of New York. In a press release issued late Sunday, Sidgmore said WorldCom will be able to continue business as usual while it reorganizes. "Chapter 11 enables us to create the greatest possible value for our creditors, preserve jobs for our employees, continue to deliver top-quality service to our customers and maintain our role in Americas national security," Sidgmore said in the statement. "We will use this time under reorganization to regain our financial health and focus, while operating with the highest integrity. We will emerge from Chapter 11 as quickly as possible and with our competitive spirit intact." At the same time it announced the bankruptcy filing, WorldCom announced that it tentatively procured "up to $2 billion" in debtor-in-possession financing, subject to approval by the court. In addition to the companys assurances that it intends to continue services, regulators and lawmakers are highly vested in helping ensure continued coverage. FCC Chairman Michael Powell said Sunday that the commission "will act vigilantly, and to the full extent of its statutory authority, to protect the integrity of the telecommunications network and protect consumers against any abrupt termination of service." The FCC is authorized to order telecommunications carriers to sustain service, and, according to sources, the FCC will also intervene in the bankruptcy proceeding to ensure that the judge understands the importance of continued operations. Related Stories:
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WorldComs mammoth debt amassed over the years required major refinancing, but the recent book-keeping scandal limited its capital-raising choices.