Report: Verizon Trying To Block MCI Bankruptcy Emergence

The Wall Street Journal

Barr, a former U.S. attorney general, also has lobbied several states to file complaints with the U.S. Bankruptcy Court and is seeking support from Washington lawmakers, the article said.

The SEC could not immediately be reached for comment.

Several competitors have voiced objections to MCI's reorganization plan, which would reduce MCI's debt to between $4.5 billion and $5 billion--the carrier had a $36 billion debt when it filed.

Competitors have also said publicly that they fear price wars once MCI re-emerges.

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"Our competitors are sayings things like our advantage is going to drive price wars, that we shouldn't be allowed to come out of this. It's the same people with a different name," said Ron McMurtrie, vice president of global marketing at MCI, during a recent interview with CRN. "For the most part, it's a lot of posturing because at a time when they had the ability to get us, they did not. We are going to drive innovation, competition and choice back into the industry, and we already started innovating and introducing new products and bundles while in Chapter 11."

Not all of MCI's creditors have approved the reorganization plan, nor has MCI's posted its audited results yet, said Keith Olsen, vice president of alternate channels at AT&T, adding that AT&T's channel has taken a significant amount of business away from MCI.

"I keep track of how many MCI deals in the channel we are winning weekly, and it has been tremendous," Olsen said. "It has not abated since they filed, and in fact [the week of May 5] was our best week yet."

MCI Chairman and CEO Michael Capellas has said the company expects to emerge from bankruptcy by September or October of this year.