WorldCom was brought down by an $11 billion US accounting scandal that caused it to file for bankruptcy protection last year. But the record losses involved have not been matched by a lengthy bankruptcy process.
In August this year a deal was approved between the company and the Securities and Exchange Commission in terms of which the telco is to pay $750 million to investors who lost money as a result of the fraud. In September WorldCom took another step forward when it reached agreement with two sets of creditors, agreeing to increase payments to them.
Friday's ruling by Federal Bankruptcy Judge Arthur J Gonzalez means that WorldCom can now take the final steps out of bankruptcy, and resume business under the new name of MCI.
Michael D Cappellas, chairman and CEO of MCI said:
"This is a great day for MCI. Against all odds, we have reached our confirmation faster than anyone expected."
Not everyone is pleased. Tom Schatz, President of consumer organisation, the Council for Citizens Against Government Waste (CCAGW) said:
"The company committed the largest fraud in history and has been suspended from federal contracts. MCI continues to con the public with its claims of reform and commitment to sound accounting practices."
He continued:
"Surely the bankruptcy court should not have ignored the continued evidence of MCI's misdeeds, including the most recent revelations that the company may have overcharged the government for its services, and that it may have illegally routed calls to competitors, avoiding long distance access charges and other fees."
AT&T filed a lawsuit against rival WorldCom in early September alleging racketeering and fraud over the alleged improper rerouting of telephone calls. WorldCom denies the charges.
