US federal regulators have begun an investigation into creditor actions in the WorldCom bankruptcy and have demanded thousands of documents from bondholders related to the largest US bankruptcy, according to court documents.
The US Securities and Exchange Commission investigation is focusing in particular on the actions of one WorldCom creditor, a New York investment firm named Blue River Capital, a source familiar with the investigation told reporters.
Blue River declined to comment on any SEC matters. Its founder, Mr Van Greenfield, was previously co-chairman of the WorldCom creditors committee.
The exact nature of the SEC investigation could not be determined. One source said the investigation is not related to WorldCom, which changed its name to MCI after emerging from bankruptcy protection in April.
The SEC declined to comment on the request, as did MCI and lawyers for Akin Gump Strauss Hauer & Feld, a New York law firm that represents the committee.
WorldCom, one of the largest US phone carriers, sought Chapter 11 bankruptcy protection in July, 2002, burdened by billions of dollars in debt from an acquisition spree and multiple fraud charges against senior executives.
Much of the bondholder debt was converted to equity following the bankruptcy.
As part of its emergence, MCI settled fraud charges by the SEC and paid $750 million in cash and stock. Earlier this year, the SEC asked MCI for information regarding state tax shelters set up by accounting firm KPMG.