In re WorldCom, Inc.
A MISSION OF EXTRAORDINARY SCOPE
After WorldCom filed for chapter 11 protection in June 2002, its new management
asked us to take it through bankruptcy with “an outrageous sense of urgency.”
The task was massive in scope and
complexity; because of the size of the bankruptcy, its multitiered creditor
structure and the governance requirements imposed by a court-appointed
FACING THE JUGGERNAUT
We filed a reorganization plan by April 2003, fulfilling the new CEO’s
100-day plan. Then the onslaught began. With billions of dollars at stake, everyone
with a potential claim filed an objection—more than 120 in all. Our strategy
was simple: we attacked every objection as a must-win issue—at one point
taking and defending 50 depositions in 50 days. Our willingness to fight
and ability to argue convincingly helped eliminate frivolous challenges
and settle many others.
When the hearing began, we had the support of 97% of the creditors and
had settled numerous objections, but still had our stiffest opposition
to confront. While moving forward to trial, we also persevered to a negotiated
resolution of the most serious objections. On October 31, 2003, the plan
was approved, only 15 months after the initial filing. The emerging company,
now known as MCI, will continue to operate as the nation’s second-largest long-distance carrier—with
a slimmed-down balance sheet and an 85% reduction in debt.