If WorldCom's collapse was dramatic, the telecommunications group's recovery has been just as sudden.
Yesterday, less than nine months after filing for Chapter 11 bankruptcy protection in the biggest corporate collapse in US history, the company, operating under its new name, MCI, filed a reorganisation plan that should see it emerge from bankruptcy by the autumn.
The plan, which has been approved by creditors representing 90 per cent of WorldCom's debts, is the result of a 100-day process set in motion by chairman and chief executive Mr Michael Capellas in January.
The restructuring plan describes a company which, in terms of the breadth of its operations and the scope of its ambitions, is not all that different from the one Bernie Ebbers created.
Its global network will be kept intact. It will continue to serve large corporations worldwide and US residential customers.
Yet much has also changed. The main achievement of the plan is to wipe out most of the company's $41 billion (€38.04 billion) debt, converting most of it into equity at about a third of its original value. Excluding cash reserves, the new company will have $3.5 billion-$4.5 billion of debt and a total value of around $12 billion in debt and equity. The company has net cash of about $3 billion.
MCI's rapid reorganisation underlines the speed and efficiency of the US bankruptcy process. The restructuring has been completed even though investigators are still attempting to uncover the full extent of the accounting fraud.
A team of auditors that has been studying WorldCom's books has yet to complete the revisions they need to make accounts for the past three years.
The process has also left MCI's competitors seething. Telecom executives argue that a company which not only defrauded investors but also skewed the standards of performance for an entire industry, prompting companies to make foolish investments or cut corners, should have been more properly punished.
They fear that an unleveraged MCI will have an unfair advantage in competing for customers against operators whose debts have not been erased.
WorldCom employs more than 150 people in Dublin and provides internet, data-hosting and telecoms services to thousands of customers in the Republic. - (Financial Times Service)
