WorldCom to file 43 extra bankrupty petitions

CLINTON, Miss: WorldCom Inc., the bankrupt telephone company facing legal and Congressional probes over billions of dollars of accounting irregularities, said it filed additional bankruptcy petitions for 43 of its subsidiaries.

WorldCom, the No. 2 long distance phone company, said the subsidiaries were effectively inactive and had no significant debt. It said it decided to file for bankruptcy on their behalf to provide them the same relief under Chapter 11 as its other subsidiaries.

The company filed the world's largest bankruptcy in July amid a huge accounting scandal that at the time totaled $3.8 billion in potential fraud. It has since uncovered another $3.8 billion in errors and has warned the Securities and Exchange Commission, which is conducting a probe into WorldCom, that additional adjustments are likely.

When it originally filed for bankruptcy, WorldCom said the petition covered 16 direct subsidiaries and another 162 indirect subsidiaries. In a statement on Friday, WorldCom said the additional 43 petitions, filed with the U.S. Bankruptcy Court for the Southern District of New York in Manhattan, will be presented in a hearing set for Nov. 12.

"Today's filing is a formality," John Dubel, chief financial officer of WorldCom said in a statement. "We have asked the Court for permission to jointly administer these cases under the WorldCom petition."

Earlier this week, WorldCom said it expected to restate more than $9 billion in earnings, as it faced additional charges of fraud filed by the SEC for misleading investors about its financial health since at least 1999. In addition, Clinton, Mississippi-based WorldCom still faces several shareholder lawsuits and investigations by various Congressional committees. The United States attorney's office in New York also is investigating WorldCom executives.

© Reuters