Bankruptcy was said to be imminent for WorldCom Inc., in what would eclipse Enron's as the largest such filing in US corporate history. The telecommunications powerhouse, whose MCI unit is the nation's second-largest long-distance provider, disclosed $3.9 billion in accounting irregularities last month, prompting fraud charges by the Securities and Exchange Commission. In an effort to continue services for its 20 million customers during the Chapter 11 process, WorldCom reportedly is negotiating with creditor banks for up to $2.5 billion in "debtor in possession" financing. WorldCom is based in Clinton, Miss.
AOL Time Warner Inc. implemented a major shakeup of its management, with several executives from the Time Warner media empire moved to more prominent positions following Thursday's resignation of Robert Pittman as chief operating officer and head of its AOL online unit. Pittman was one of the most vocal promoters of last year's $112 billion megamerger, a deal that has failed to live up to shareholder expectations. Shares in New York-based AOL Time Warner were down 87 cents to $11.58 on the New York Stock Exchange Friday, the lowest level in a year.
US investors who bought Vivendi Universal shares between Feb. 11 and July 3 brought a lawsuit seeking class-action status against the embattled company and its former chairman, Jean-Marie Messier. According to the Financial Times, the suit, filed in New York federal court, alleges that Mr. Messier inflated the value of the group's shares by concealing serious financial problems. During the period in question, Vivendi Universal shares fell from $48.40 to $14.01, culminating in the ousting of Messier and the revelation of a liquidity crisis.
In the second-largest meat recall in US history, ConAgra Beef Co. of Greeley, Colo., said Friday that 19 million pounds of hamburger has to be destroyed because of E. coli concerns. Company officials and the Agriculture Department said the affected meat, which has been on shelves since April, could have been sold under various brand names. The labels on all of the recalled products bear the code "EST: 969" inside the USDA seal of inspection. The complete list of recalled products is on the Web site of the USDA's Food Safety and Inspection Service. The beef should be returned to the place of purchase.