April 11, 2003, 8:32 AM — WorldCom Inc. plans to drop its tainted name in favor of MCI as the bankrupt U.S. carrier seeks to establish a new image with customers, The Wall Street Journal reported Friday, citing people familiar with the company.
The company could change its name as early as next week, when WorldCom files its reorganization plan with the U.S. Bankruptcy Court for the Southern District of New York, the newspaper said.
WorldCom's subsidiary in London declined to comment.
MCI Communications Corp. was once a popular name to U.S. businesses and consumers. The company introduced, among other things, the successful Friends & Family discount telephone scheme, which has since been copied by operators around the world.
WorldCom acquired MCI in 1998.
By changing its name, WorldCom hopes to distance itself from its still-mounting accounting fraud, which could total as much as $11 billion, according to WSJ's sources. The MCI name enjoys widespread recognition, these people said.
WorldCom rose from obscurity to Wall Street fame after capping a string of nearly 70 acquisitions, including MCI, but stumbled after regulators blocked its bid for Sprint Corp. After that failed acquisition, it was pretty much downhill for the Clinton, Mississippi, long-distance operator, which has extensive operations in Europe.
The revelation of fraud in June helped push WorldCom into the largest Chapter 11 bankruptcy court proceedings in U.S. corporate history.