The opening day of a hearing on MCI's plans for emerging from bankruptcy ended early yesterday, as the company's representatives and those of two major organisations opposing its reorganisation plan informed the court that they may be near a settlement.
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The parties concerned were given until midnight on Monday to conclude their negotiations. When the court reconvenes later today, the judge Arthur Gonzalez will expect either a status report on settlement plans or to proceed with the beginning of the hearing.
Gonzalez had rejected motions for a longer postponement of the hearing and for a summary judgment rejecting MCI's reorganisation plan. Since a one-day delay in opening the hearing would not slow proceedings unduly and could lead to a settlement that would significantly alter the issues before the court, a delay of several hours was deemed acceptable by the judge.
MCI's representatives said they believed a settlement is possible with two of the most vocal objectors to its reorganisation plan, groups representing the holders of bonds and trade claims on WorldCom's former MCI subsidiary.
The hearing, which is expected to last several weeks, will determine if MCI, still legally operating as WorldCom, can emerge from the nation's biggest bankruptcy in the wake of an $11bn accounting scandal that led to state and federal charges and sanctions against the company and its former top executives.
A number of creditors have lodged objections to MCI's reorganisation plan, although MCI has made progress towards settling with all but 15 or 16 of the objecting parties.
Stacy Cowley writes for IDG News Service