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WorldCom Files For Bankruptcy, Having Declared $3.8 Billion Of Expenses As RevenueJULY 21, 2002 · 07:12
The second-largest telecommunications company in the United States has admitted that it capitalised ordinary line costs as capital spending for six quarters, which is the sort of thing that is done once, by a person, on purpose.
THE HEADQUARTERS IN CLINTON, MISSISSIPPI. THE PARKING LOT HAS 28,000 SPACES.
( FILE PHOTO )
THE HEADQUARTERS IN CLINTON, MISSISSIPPI. THE PARKING LOT HAS 28,000 SPACES.
WASHINGTON, July 21 -- WorldCom filed for Chapter 11 bankruptcy protection tonight, revealing as it did so that $3.8 billion of ordinary operating expenses had been recorded as capital investment over six quarters, inflating reported profits and the share price during the period.
The former chief executive remains chief executive. The board, which approved the treatment of the expenses, has been described in a filing by one of its own members as "not having understood what it was approving," a phrase that is very likely to be repeated for years.
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