UPDATE - WorldCom will keep operating under Chapter 11

ITworld.com |  Networking

-- further tarnishing of the company's reputation as Sullivan and former CEO Bernie Ebbers refused to answer questions put to them by a U.S. House of Representatives committee by pleading the Fifth Amendment to the U.S. Constitution, which allows citizens to decide not to answer questions that may incriminate them during an investigation.

-- the discovery that the accounting irregularities at WorldCom began more than two years ago and showed a history of lies and financial wrongdoing by executives trying to reach profit forecasts.

-- suggestions from U.S. Representatives Billy Tauzin and Michael Oxley that company officials convicted of serious fraud charges could be sentenced to jail terms.

-- an attempt by IDT Corp. to buy up some of WorldCom's core assets such as its local phone offerings for businesses and MCI dialup services.

-- completing a restructuring which will see 17,000 employees leave the company.

Any or all of the above factors could play a part in the length of time it takes to complete the bankruptcy plan, said Hotchkiss. Legal issues have historically played a role in drawing out bankruptcy proceedings, and judges often extend deadlines in complex cases, she said. Sidgmore said during the press conference that the company hopes to emerge from bankruptcy by the end of the first quarter in 2003, but that's probably an optimistic outlook, according to Hotchkiss.

(Cara Garretson in Washington contributed to this report.)

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