WorldCom files for Chapter 11

Beleaguered telco WorldCom made the largest ever filing for Chapter 11 bankruptcy protection in US corporate history on Sunday afternoon.

But the filing only covers WorldCom's US subsidiaries, not its European operations.

The decision to seek protection from creditors was made yesterday at a court in Manhattan after an afternoon meeting of its board members. The filing lists $107bn in assets and $41bn in debt, including $24bn in bonds.

Chapter 11 will effectively allow WorldCom to conduct business as usual while a restructuring plan is devised.

WorldCom has already arranged around $2bn in debtor-in-possession financing, including $750m which has already been committed by several banks including JP Morgan Chase & Co, Citigroup and General Electric Capital.

Pending approval by the Bankruptcy Court, the company will be allowed to operate its business normally while it devises a new strategy to reduce its debt and clean up its balance sheet.