MCI writes off AT&T debt as it heads for re-emergence

WorldCom (MCI) yesterday reached an out of court settlement with rival AT&T which included the bankrupt telco writing off USD120 million in charges owed by AT&T. Details of the agreement were not disclosed but a court motion filed on Monday revealed that MCI was claiming AT&T owed it USD220 million for various services, whilst its rival said it was owed USD100 million in similar charges; both companies agreed to forgo all charges as part of the settlement. The agreement is an important step in MCI’s attempts to emerge from Chapter 11 bankruptcy protection, a plan that the telco has recently had to delay by a further two months as it seeks to complete its reorganisation.