Embattled WorldCom is seeking $3 billion in emergency funding from lender banks, the Financial Times reported, as the telecommunications company mulls whether to file what would eclipse Enron as the largest corporate bankruptcy in US history. A decision was expected within three weeks. WorldCom, under investigation by the Securities and Exchange Commission (SEC) and the Justice Department, is $30 billion in debt and has laid off 17,000 workers.
VoiceStream Wireless is in preliminary talks on a merger with AT&T Wireless Services Inc. that would create the US's second-largest cellphone provider, The Wall Street Journal reported. It put the potential worth of a deal at $10 billion. Both companies have held similar discussions with others in the troubled industry without reaching agreements, the Journal noted. VoiceStream, a subsidiary of Deutsche Telekom, is based in Bellevue, Wash.
Vice President Cheney and Halliburton Co., the Dallas oil-industry services firm he headed from 1995 to 2000, were sued in federal court there by Judicial Watch. The conservative legal group alleges that an accounting policy adopted in 1998 for reporting overbudget construction jobs defrauded stockholders. The SEC is looking into the policy, which Halliburton says is in line with accepted industry principles. Judicial Watch previously sued to obtain records of the task force Cheney headed to draft the Bush administration's energy policy.
The union representing United Airlines' machinists said "no" to a proposed 10 percent pay cut for its 35,000 members, calling the idea "a considerable sacrifice." The machinists previously OK'd a deferment of retroactive pay worth $498 million, but a spokesman said "additional relief will not be coming from these employees." Analysts said the new decision could jeopardize the application by United for $1.8 billion in federal loan guarantees, since it could cause members of the pilots' union to reverse their tentative agreement on a $520 million reduction in pay over three years. The airline has said it needs concessions from all of its employee groups to show the government it can be financially stable again.
Regulators opened an investigation into Vivendi Universal's accounting practices just as the global media giant appeared to be locking in the first of two new sources of emergency funding worth a combined $3.8 billion, the Financial Times reported. The newspaper's online edition said the move by France's Commission des Opérations de Bourse cast doubt on the rescue effort. It quoted a company "insider" as saying the probe was "not a good sign."