MCI logo

MCI, Inc. was an American telecommunications company that was headquartered in Ashburn, Virginia. The corporation was the result of the merger of WorldCom (formerly known as LDDS) and MCI Communications, and used the name MCI WorldCom followed by WorldCom before taking its final name on April 14, 2003 as part of the corporation's emergence from bankruptcy. The company formerly traded on NASDAQ under the symbols "WCOM" (pre-bankruptcy) and "MCIP" (post-bankruptcy). The corporation was purchased by Verizon Communications with the deal closing on January 6, 2006, and now operates under the name Verizon Business. This is a copyrighted and/or trademarked logo. ... This is a copyrighted and/or trademarked logo. ... BlackBerry 7100t Telecommunications is the communication of information over a distance. ... Ashburn, Virginia is an unincorporated area located in Loudoun County, Virginia and is part of the Baltimore-Washington Metropolitan Area. ... MCIs original corporate logo MCI Communications was an American telecommunications company that was instrumental in legal and regulatory changes that led to the breakup of the AT&T monopoly of American telephony. ... April 14 is the 104th day of the year in the Gregorian calendar (105th in leap years). ... 2003 (MMIII) was a common year starting on Wednesday of the Gregorian calendar. ... Verizon Communications (NYSE: VZ) is a major telecom company based in New York City. ... January 6 is the 6th day of the year in the Gregorian calendar. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ...

MCI's history, combined with the histories of companies it has acquired, echoes most of the trends that have swept American telecommunications in the past half-century: It was instrumental in pushing legal and regulatory changes that led to the breakup of the AT&T monopoly that dominated American telephony; its purchase by WorldCom and subsequent bankruptcy in the face of accounting scandals was symptomatic of the Internet excesses of the late 1990s. It accepted a proposed purchase by Verizon for US$7.6 billion. AT&T Inc. ... This article or section should include material from Bell Atlantic This article or section should include material from GTE Verizon Communications (NYSE: VZ) is a local exchange telephone company formed by the merger of Bell Atlantic, a former Bell Operating Company, and GTE, which was the largest independant local exchange...

For a time, WorldCom (WCOM) was the United States' second largest long distance phone company (AT&T was the largest). WorldCom grew largely by acquiring other telecommunications companies, most notably MCI Communications. It also owned the Tier 1 ISP UUNET, a major part of the Internet backbone. It was based in Clinton, Mississippi before moving to its present corporate headquarters. TATA Engineering and Locomotive Company A telephone company (or telco) provides telecommunications services such as telephony and data communications. ... AT&T Inc. ... MCIs original corporate logo MCI Communications was an American telecommunications company that was instrumental in legal and regulatory changes that led to the breakup of the AT&T monopoly of American telephony. ... A Tier 1 carrier is a telco or ISP that is at the top of the telecommunications peering and settlements food chain. ... UUNET Technologies Logo Post-WorldCom UUNET Logo UUNET is one of the oldest and largest Internet Service Provider. ... The Internet backbone refers to the main trunk connections of the Internet. ... Clinton is a city located in Hinds County, Mississippi. ...

History

Corporate founding

Long Distance Discount Services, Inc. (LDDS) began in Jackson, Mississippi in 1983. In 1985 LDDS selected Bernard Ebbers to be its CEO. The company went public in August 1989 when it merged with Advantage Companies Inc. The company name was changed to LDDS WorldCom in 1995, and later just WorldCom. Jackson skyline Nickname: The Best of the New South and The Bold, New City Map Location in Mississippi Political Statistics Founded 1822 County Hinds County Mayor Frank Melton Geographic Statistics Area  - Total  - Land  - Water 276. ... 1983 (MCMLXXXIII) was a common year starting on Saturday of the Gregorian calendar. ... This article is about the year. ... Bernard John Ebbers Bernard John Ebbers, also known as Bernie Ebbers (born August 27, 1941 in Edmonton, Alberta), is a Canadian-born businessman. ... Chief Executive Officer (CEO) is the job of having the ultimate executive responsibility or authority within an organization or corporation. ... 1989 (MCMLXXXIX) was a common year starting on Sunday of the Gregorian calendar. ... 1995 (MCMXCV) was a common year starting on Sunday of the Gregorian calendar. ...

The company’s growth under WorldCom was fueled primarily through acquisitions during the 1990s and reached its apex with the acquisition of MCI in 1998 (see below). Among the companies that were bought or merged with WorldCom were Advanced Communications Corp. (1992), Metromedia Communication Corp.(1993), Reurgens Communications Group(1993), IDB Communications Group, Inc (1994), Williams Technology Group, Inc. (1995), and MFS Communications Company (1996). The acquisition of MFS included UUNet Technologies, Inc., which had been acquired by MFS shortly before the merger with WorldCom. In February 1998, a complex transaction saw Worldcom purchase online pioneer CompuServe from its parent company H&R Block. Worldcom then retained the CompuServe Network Services Division, sold its online service to America Online, and received AOL's network division, ANS. The acquisition of Digex (DIGX) in June 2001.. 1992 (MCMXCII) was a leap year starting on Wednesday. ... Metromedia (also often MetroMedia) was a conglomeration of radio and television stations in the United States that existed from the demise of the DuMont Television Network in the 1950s until the formation of the Fox Network in the 1980s. ... 1993 (MCMXCIII) was a common year starting on Friday of the Gregorian calendar and marked the Beginning of the International Decade to Combat Racism and Racial Discrimination (1993-2003). ... 1994 (MCMXCIV) was a common year starting on Saturday of the Gregorian calendar, and was designated the International year of the Family. ... 1995 (MCMXCV) was a common year starting on Sunday of the Gregorian calendar. ... 1996 (MCMXCVI) was a leap year starting on Monday of the Gregorian calendar, and was designated the International Year for the Eradication of Poverty. ... UUNET Technologies Logo Post-WorldCom UUNET Logo UUNET is one of the oldest and largest Internet Service Provider. ... 1998 (MCMXCVIII) was a common year starting on Thursday of the Gregorian calendar, and was designated the International Year of the Ocean. ... CompuServe, (in full, CompuServe Information Services, or CIS), was the first major commercial online service in the United States, dominating the field during the 1980s and remaining a major player through the mid-1990s when it was sidelined by the rise of GUI-based services such as America Online (AOL). ... H&R Block (NYSE: HRB) is a tax preparation and personal finance management company founded by brothers Henry W. and Richard Bloch in Kansas City in 1955 (they changed the name of the company to prevent mispronounciation). ... To meet Wikipedias quality standards, this article may require cleanup. ...

MCI acquisition

MCI WorldCom logo (Used from 1998–2000)

On November 10, 1997, WorldCom and MCI Communications announced their US$37 billion merger to form MCI WorldCom, making it the largest merger in US history. On September 15, 1998 the new company, MCI WorldCom, opened for business. MCI WorldCom Corporate Logo This is a copyrighted and/or trademarked logo. ... MCI WorldCom Corporate Logo This is a copyrighted and/or trademarked logo. ... November 10 is the 314th day of the year (315th in leap years) in the Gregorian Calendar, with 51 days remaining. ... 1997 (MCMXCVII) was a common year starting on Wednesday of the Gregorian calendar. ... MCIs original corporate logo MCI Communications was an American telecommunications company that was instrumental in legal and regulatory changes that led to the breakup of the AT&T monopoly of American telephony. ... September 15 is the 258th day of the year (259th in leap years). ... 1998 (MCMXCVIII) was a common year starting on Thursday of the Gregorian calendar, and was designated the International Year of the Ocean. ...

Sprint merger

WorldCom logo (Used from 2000–2003)

On October 5, 1999 Sprint Corporation and MCI WorldCom announced a $129 billion dollar merger agreement between the two companies. The deal would have been the largest corporate merger in history up to that time. The new company was to have been WorldCom and would have been the largest communications company in the United States. The merger would have put AT&T in the number two spot of the largest communications companies in the US for the first time in history. However the deal did not go through because of pressure from the US Department of Justice and the EU on concerns of it creating a monopoly. On July 13, 2000. the Board of Directors of both companies acted to terminate the merger. Later, in 2000, MCI WorldCom renamed itself WorldCom without Sprint being part of the company. This image is copyrighted. ... This image is copyrighted. ... October 5 is the 278th day of the year (279th in Leap years). ... 1999 (MCMXCIX) was a common year starting on Friday, and was designated the International Year of Older Persons by the United Nations. ... Sprint Nextel Corporation (NYSE: S), headquartered in Reston, Virginia, is one of the largest telecommunications companies in the United States. ... AT&T Inc. ... The United States Department of Justice (DOJ) is a Cabinet department in the United States government designed to enforce the law and defend the interests of the United States according to the law and to ensure fair and impartial administration of justice for all Americans. ... July 13 is the 194th day (195th in leap years) of the year in the Gregorian Calendar, with 171 days remaining. ... This article is about the year 2000. ... This article is about the year 2000. ... Sprint Nextel Corporation (NYSE: S), headquartered in Reston, Virginia, is one of the largest telecommunications companies in the United States. ...

Accounting Scandals

Bernard Ebbers became very wealthy from the rising price of his holdings in Worldcom’s stock. However, shortly after the MCI acquisition 1998, the telecommunications industry entered a downturn and Worldcom’s growth strategy suffered a serious blow when it was forced to abandon its proposed merger with Sprint in late 2000. By that time, Worldcom’s stock was declining and Ebbers came under increasing pressure from banks to cover margin calls on his Worldcom stock that was used to finance his other businesses (timber and yachting, among others). During 2001, Ebbers persuaded Worldcom’s board of directors to provide him corporate loans and guarantees in excess of $400 million to cover his margin calls, but this strategy ultimately failed and Ebbers was ousted as CEO in April 2002 and replaced by John Sigmore, former executive of UUNet Technologies, Inc.. Bernard John Ebbers Bernard John Ebbers, also known as Bernie Ebbers (born August 27, 1941 in Edmonton, Alberta), is a Canadian-born businessman. ... UUNET Technologies Logo Post-WorldCom UUNET Logo UUNET is one of the oldest and largest Internet Service Provider. ...

Beginning in 1999 and continuing through May 2002, the company (under the direction of Scott Sullivan (CFO), David Myers (Controller) and Buford (“Buddy”) Yates (Director of General Accounting)) used fraudulent accounting methods to mask its declining financial condition by painting a false picture of financial growth and profitability to prop up the price of Worldcom’s stock. The fraud was accomplished primarily in two ways: 1) underreporting ‘line costs’ (interconnection expenses with other telecommunication companies) by capitalizing these costs on the balance sheet rather than properly expensing them and 2) inflating revenues with bogus accounting entries from ‘corporate unallocated revenue accounts’. Worldcom’s internal audit department uncovered approximately $3.8 billion of the fraud in June 2002 during a routine examination of capital expenditures and alerted the company’s new auditors, KPMG (who had replaced Arthur Andersen, Worldcom’s external auditors during the fraud). Shortly thereafter, the company’s audit committee and board of directors were notified of the fraud and acted swiftly: Sullivan was fired, Myers resigned, Arthur Andersen withdrew its audit opinion for 2001, and the U.S. Securities and Exchange Commission (SEC) launched an investigation into these matters on June 26, 2002 (see accounting scandals). By the end of 2003, it was estimated that the company's total assets had been inflated by around $11 billion. William Scott Sullivan is a pitcher currently with the Kansas City Royals and has a career ERA of 3. ... A controller is a person or device that exercises or attempts to exercise control or influence. ... KPMG is one of the largest professional services firms in the world. ... Arthur Andersen LLP, based in Chicago, Illinois, was once one of the Big Five accounting firms and performed auditing, tax, and consulting services. ... The U.S. Securities and Exchange Commission, commonly referred to as the SEC, is the United States governing body which has primary responsibility for overseeing the regulation of the securities industry. ... June 26 is the 177th day of the year (178th in leap years) in the Gregorian Calendar, with 188 days remaining. ... For the Cusco album, see 2002 (album). ... Accounting scandals, or corporate accounting scandals are political and business scandals which arise with the disclosure of misdeeds by trusted executives of large public corporations. ... 2003 (MMIII) was a common year starting on Wednesday of the Gregorian calendar. ...

Bankruptcy

On July 21, 2002, WorldCom filed for Chapter 11 bankruptcy protection in the largest such filing in United States history. WorldCom changed its name to MCI, and moved the corporate headquarters from Mississippi to Virginia, on April 14, 2003. July 21 is the 202nd day (203rd in leap years) of the year in the Gregorian Calendar, with 163 days remaining. ... For the Cusco album, see 2002 (album). ... Chapter 11 is a part of the United States Code dealing with bankruptcy. ... Official language(s) English Capital Jackson Largest city Jackson Area  - Total  - Width  - Length  - % water  - Latitude  - Longitude Ranked 32nd 125,443 km² 275 km 545 km 3 30°13N to 35°N 88°7W to 91°41W Population  - Total (2000)  - Density Ranked 31st 2,697,243 23. ... Official language(s) English Capital Largest city Richmond Virginia Beach Area  Ranked 35th  - Total 110,862 km²  - Width 320 km  - Length 690 km  - % water 7. ... April 14 is the 104th day of the year in the Gregorian calendar (105th in leap years). ... 2003 (MMIII) was a common year starting on Wednesday of the Gregorian calendar. ...

Under the bankruptcy reorganization agreement, the company paid $750 million to the SEC in cash and stock in the new MCI, which was intended to be paid to wronged investors.

In May, 2003, the company was given a no-bid contract by the United States Department of Defense to build a cellular telephone network in Iraq. The deal has been criticized by competitors and others who cite the company's lack of experience in the area. [1] A no-bid contract is a military or government contract that is made directly with a corporation, bypassing the standard process of bidding. ... The United States Department of Defense, abbreviated as DoD or DOD and sometimes called the Defense Department, is a civilian Cabinet organization of the United States government. ... Cellular redirects here. ...

Post-bankruptcy

The company emerged from Chapter 11 bankruptcy in 2004 with about $5.7 billion in debt and $6 billion in cash. About half of the cash was intended to pay various claims and settlements. Previous bondholders ended up being paid 35.7 cents on the dollar, in bonds and stock in the new MCI company. The previous stockholders' stock was valueless. Chapter 11 of the Bankruptcy Code governs the process of reorganization under the bankruptcy laws of the United States. ... 2004 (MMIV) was a leap year starting on Thursday of the Gregorian calendar. ... In finance, a bond is a debt security, in which the issuer owes the holders a debt and is obliged to repay the principal and interest (the coupon). ... In financial terminology, stock is the capital raised by a corporation, through the issuance and sale of shares. ...

It has yet to pay many of its creditors, who have waited for two years for a portion of the money owed. Many of the small creditors include former employees, primarily those who were laid off in June 2002 and whose severance and benefits were withheld when WCOM filed for bankruptcy. A group of some of these employees have formed the exWorldCom5100 group.

On February 14, 2005, Verizon Communications agreed to acquire MCI for $7.6 billion. February 14 is the 45th day of the year in the Gregorian calendar. ... 2005 (MMV) was a common year starting on Saturday of the Gregorian calendar. ... Verizon Communications (NYSE: VZ) is a major telecom company based in New York City. ...

On March 15, 2005 Bernard Ebbers was found guilty of all charges and convicted on fraud, conspiracy and filing false documents with regulators — all related to the $11 billion accounting scandal at the telecommunications company he founded. He was sentenced to 25 years in prison. Other former WorldCom officials charged with criminal penalties in relation to the company's financial misstatements include former CFO Scott Sullivan (entered a guilty plea on March 2, 2004 to one count each of securities fraud, conspiracy to commit securities fraud, and filing false statements [2]), former controller David Myers (pleaded guilty to securities fraud, conspiracy to commit securities fraud, and filing false statements on September 27, 2002 [3]), former accounting director Buford Yates (pleaded guilty to conspiracy and fraud charges on October 7, 2002 [4]), and former accounting managers Betty Vinson and Troy Normand (both pleading guilty to conspiracy and securities fraud on October 10, 2002 [5]). March 15 is the 74th day of the year in the Gregorian Calendar (75th in Leap years). ... 2005 (MMV) was a common year starting on Saturday of the Gregorian calendar. ... Bernard John Ebbers Bernard John Ebbers, also known as Bernie Ebbers (born August 27, 1941 in Edmonton, Alberta), is a Canadian-born businessman. ... CFO is usually short for Chief Financial Officer, but may also mean: Carrier frequency offset Ceramic fiber optics Chief Fire Officer Chief of Flight Operations Conselho Federal de Odontologia (cfo. ... William Scott Sullivan is a pitcher currently with the Kansas City Royals and has a career ERA of 3. ... March 2 is the 61st day of the year in the Gregorian Calendar (62nd in leap years). ... 2004 (MMIV) was a leap year starting on Thursday of the Gregorian calendar. ... A controller is a person or device that exercises or attempts to exercise control or influence. ... September 27 is the 270th day of the year (271st in leap years) in the Gregorian calendar, with 95 days remaining. ... For the Cusco album, see 2002 (album). ... It has been suggested that Board of Trustees be merged into this article or section. ... October 7 is the 280th day of the year (281st in leap years). ... For the Cusco album, see 2002 (album). ... October 10 is the 283rd day of the year (284th in Leap years). ... For the Cusco album, see 2002 (album). ...

On July 13, 2005 Bernard Ebbers received a sentence that would keep him in prison (potentially Yazoo City in Mississippi) for 25 years. At the time of the sentence Ebbers was 63 years old. He may potentially be let out of prison at the age of 83 on terms of good behavior. In March of 2005, 16 of WorldCom's 17 former underwriters reached settlements with the investors ([6]). Citigroup settled for $2.65 billion on May 10, 2004 ([7]). July 13 is the 194th day (195th in leap years) of the year in the Gregorian Calendar, with 171 days remaining. ... 2005 (MMV) was a common year starting on Saturday of the Gregorian calendar. ... Yazoo City is a city located in Yazoo County, Mississippi. ... For a time, WorldCom (WCOM) was the United States second largest long distance phone company (AT&T was the largest). ... Citigroup, Inc. ...

Verizon | MCI Merger

On February 14, 2005, Verizon agreed to acquire MCI, formerly WorldCom, after SBC Communications agreed to acquire AT&T just a few weeks earlier. The MCI/Verizon merger was put on hold until March 17, 2005 for them to evaluate a rival offer from Qwest, which made an offer that was potentially worth more. MCI accepted Verizon's initial bid, although it had a lower cash value, because of their perceived financial stability in comparison to Qwest’s, but holders of 26% of MCI stock requested that they evaluate the merits of both offers before making a final decision. Qwest later lost the battle for the acquisition of MCI. On October 6, 2005, the Special Meeting of MCI Stockholders on the subject of Verizon's acquisition resulted in 64 percent of outstanding shares voting in favor of Verizon's offer. The European Union regulator approved the merger on October 7, stating that a combined company would still face strong competitions in Europe. U.S. regulatory requirements were satisfied by December 29, 2005. MCI has been incorporated into Verizon with the name Verizon Business. February 14 is the 45th day of the year in the Gregorian calendar. ... 2005 (MMV) was a common year starting on Saturday of the Gregorian calendar. ... This article or section should include material from Bell Atlantic This article or section should include material from GTE Verizon Communications (NYSE: VZ) is a local exchange telephone company formed by the merger of Bell Atlantic, a former Bell Operating Company, and GTE, which was the largest independant local exchange... SBC Communications NYSE: SBC is an American telecommunications company based in San Antonio, Texas. ... AT&T Inc. ... March 17 is the 76th day of the year in the Gregorian Calendar (77th in Leap years). ... 2005 (MMV) was a common year starting on Saturday of the Gregorian calendar. ... Qwest Communications International Inc. ... October 6 is the 279th day of the year (280th in Leap years). ... 2005 (MMV) was a common year starting on Saturday of the Gregorian calendar. ... Motto: E pluribus unum (1789 to 1956) (Latin: Out of Many, One) In God We Trust (1956 to present) Anthem: The Star-Spangled Banner Capital Washington, D.C. Largest city New York City Official language(s) None at federal level; English de facto Government • President • Vice President Federal Republic George... December 29 is the 363rd day of the year (364th in leap years) in the Gregorian Calendar, with 2 days remaining. ... 2005 (MMV) was a common year starting on Saturday of the Gregorian calendar. ...

The merger closed on January 6, 2006.[8] January 6 is the 6th day of the year in the Gregorian calendar. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ...

See also

• Corporate abuse
• Corporate governance

Corporate abuse refers to incidents that involve unethical behavior on behalf of a corporation; a case of corporate abuse may be a scandal, fraud, or negligence toward the corporations employees and/or the local community. ... Corporate governance is the set of processes, customs, policies, laws and institutions affecting the way a corporation is directed, administered or controlled. ...

References

• Lynne W. Jeter (2003). Disconnected: Deceit and Betrayal at WorldCom. Wiley. ISBN 047142997X.
• First Interim Report of Dick Thornburgh, Bankruptcy Court Examiner, United States Bankruptcy Court for the Southern District of New York, In re WorldCom, Inc., Case No. 02-15533 (AJG) (November 4, 2002)

External links

• MCI corporate website
• Verizon Business corporate website

Credit risk

• Moody's KMV Default Case Studies

Third party

• Worldcom Securities Litigation - Official Worldcom class action suit / settlement update site
• HavenWorks' WorldCom News
• Forbes article on WorldCom scandal
• BBC News - WorldCom files for bankruptcy
• Analyst Coached WorldCom Chief on His Script, The New York Times, February 27, 2003
• CFO Magazine, April 21, 2004, "MCI Emerges from Bankruptcy"
• cnn.com 07-13-2005 "Ebbers gets 25 years"
• Largest US Corporate Bankruptcies