Leaner MCI leaves Chapter 11 bankruptcy behind
The company had to ride out a huge accounting scandal
Computerworld - Telecommunications company MCI Inc. today announced its emergence from Chapter 11 bankruptcy as it pushes forward to bring in new business and offer deeper communications capabilities to corporate users.
In a conference call today with journalists, MCI President and CEO Michael Capellas called the bankruptcy path "sort of like a marathon with hurdles," but said the company is now stronger and ready to focus on new growth strategies.
"We are seeing major, major technological forces in the industry," which are being driven by business demand for delivering data and video, he said. Those demands, he said, are a perfect fit for Ashburn, Va.-based MCI, which has a major IP network to handle the delivery of those services.
"We've got a great set of capabilities, and we're going to go out there and execute our plan," Capellas said.
The company's bankruptcy reorganization plan was created Oct. 31 by the U.S. Bankruptcy Court for the Southern District of New York.
Capellas thanked the company's 50,000 employees, whom he credited with helping the company get through the bankruptcy process. "I think really today is a day of celebration," he said. "I don't think we view this as the finish line, but it's now time to start a new race."
The company will now move to bolster business with several strategies aimed at taking advantage of its strengths, Capellas said, including an expansion into international markets and growing its managed services business. The ultimate winner in the marketplace will be the company best able to provide simple, converged products and services that can manage digitized content on a global IP network securely and reliably, he said.
Asked if the lack of a wireless business within the company will hinder MCI's efforts to bundle services to customers, Capellas noted both good and bad points.
"You will not see us get into the procurement of wireless handsets or end-user devices," he said. But MCI will expand its managed services offerings to allow customers to use multiple service carriers while maintaining the benefits of its security offerings. "Major partnerships will be easier out of bankruptcy," he said.
MCI, formerly known as WorldCom Inc., was embroiled in a massive accounting scandal after the U.S. Securities and Exchange Commission filed fraud charges against WorldCom in June 2002 (see story). Last month, the company restated its 2000 and 2001 earnings (see story).
The company declared bankruptcy in July 2002 even as it continued to disclose a string of accounting irregularities that totaled $11 billion.
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