MCI enters ‘not guilty’ plea in Oklahoma

Troubled US carrier MCI (formerly WorldCom) has pleaded not guilty to charges brought against it by Oklahoma state prosecutors, the first criminal case filed against the telco in relation to its alleged USD11 billion accounting fraud. After entering its plea at a hearing in the County District Court, MCI deputy general counsel Carol Petren slammed the Oklahoma Attorney General Drew Edmondson for bringing the charges saying that ‘it is extremely disheartening that Mr Edmondson has brought charges against the company, given the dramatic steps MCI has taken to put its house in order’. She went on to illustrate the internal changes which had taken place in the company, aimed at ensuring there would be no repeat of the problems which led to the US’s largest ever accounting fraud and bankruptcy, adding that the law suit would ‘only hurt innocent employees’. However, the Attorney General countered that the filing had resulted in no job losses and that despite having a new management, MCI needed to be held accountable to Oklahoma victims who lost their retirement savings as a result of the fraud.

The latest twist in the ongoing MCI saga follows news earlier this week that the company’s efforts to emerge unscathed from bankruptcy had received a major boost when dissident creditors called off their legal challenge to the telco’s restructuring plan in return for a payout totalling USD455 million. One group of creditors will receive USD330 million of the pot: under the original plan they were set to get nothing. The second group of creditors were to be paid USD85 million under the old scheme, but are now set to receive a revised payment of USD125 million. The deal is believed to have cut weeks off of what was looking likely to be a long and acrimonious hearing on MCI’s restructuring plan in the New York bankruptcy courts. The revised plan must be ratified by two-thirds of the telco’s creditors and endorsed by Judge Arthur J Gonzalez.