WorldCom, as expected, filed for Chapter 11 protection in the largest corporate bankruptcy in US history. The telecommunications firm plans to keep operating while reducing its $41 billion in debts via a debt-for-equity swap, chief executive John Sidgmore said. The restructuring was expected to take about a year. WorldCom employs 60,000 people in 65 countries and provides long-distance and Internet services to 20 million customers.
The new ownership of Burger King may be announced within days, the Financial Times reported. Its online edition said the likely purchase price would be about $2.3 billion. The fast-food chain was put up for auction in March by London-based Diageo PLC, the world leader in alcoholic beverage sales. The Financial Times said the competition for Burger King has narrowed to two bidders: leveraged-buyout specialist Thomas H. Lee Co. of Boston and a consortium consisting of US equity partners Texas Pacific Group, Bain Capital Inc., and Goldman Sachs.
Salomon Smith Barney and research analyst Jack Grubman are confronting regulatory action by the National Association of Securities Dealers, The Wall Street Journal reported. The allegations, from fraud to rules violations, reportedly stem from Grubman's backing of Winstar Communications Inc., a Salomon Smith Barney client that filed for bankruptcy in April 2001. A spokeswoman for the brokerage told the Journal that Grubman's assessments "were part of a consistent and reasonable investment thesis" and that "there was no intent to deceive investors."
A group of Polaroid Corp. retirees and shareholders is challenging the court-approved $255 million sale of the company to Bank One Corp.'s One Equity Partners (OEP), The Boston Globe reported. The group wants a judge to reconsider an offer from Deutsche Bank for the bankrupt instant-photography pioneer, based in Waltham, Mass. Deutsche Bank, one of Europe's largest, bid the same amount as OEP, but would give a small stake in the reorganized company to retirees and shareholders.