AT&T steps up MCI charges: Alleges firm routed US military calls through Canada

AT&T, Verizon, Jesse Jackson, the Gray Panthers (really), and the Unions are all trying to put MCI Worldcom out of business.

AT&T routes calls through Mexico, and does the same exact thing they are charging MCI with.

It's business.. And Sprint just overcharged the Gov'T in Billions and the GSA is considering barring Sprint from bidding on Gov't Contracts.

AT&T had to pay for their infrastructure.

MCI got theirs through “other means” via theft at WorldCom.

Now MCI wants to compete with others after their major debt was forgiven while their competitors are still burdened with theirs.

So MCI is profiting from ill-gotten gains and never really being held accountable for it.

Does AT&T route military calls through Mexico?

AT&T, Verizon, Jesse Jackson, the Gray Panthers (really), and the Unions are all trying to put MCI Worldcom out of business.

The issue is the stockholders and the pensions. Those who loaned money to WorldCom, and didn't properly supervise how it was spent, according to the bankruptcy court decision, would get 100% of the company, with nothing going to those two groups.

There's something pretty bad when the money can be loaned, wasted, and then the fact that it's not paid back be used as a reason to take over the company.

Stockholders have also gotten something going to boycott MCI and through elected officials stop the government from giving contracts to MCI if the settlement isn't more equitable.

The bondholders have an awful lot more info than anyone else about company finances. Why should they get the company if they failed in oversight to see how their money was being spent?

There's something pretty bad when the money can be loaned, wasted, and then the fact that it's not paid back be used as a reason to take over the company.

In bankruptcy, secured creditors get priority claim to company assets over shareholders and unsecured creditors. It's always been that way. If it wasn't no business would ever get any kind of debt financing from any financial institution.

But, what about the oversight issue here? Shouldn't the creditors have some kind of responsibility to make sure their money isn't lining pockets? Aren't there often decisions where the original stockholders get some equity along with an arrangement to pay back some of the debt on a schedule?

Also, what about the PR? MCI has managed to make even more enemies with this. The rich guys who ran the company (into the ground) ran off with hundreds of millions of dollars. The rich guys who gave the company the money to waste now get the company because it isn't paid back. And everybody on top wonders why people are slow to go back to stock investing.

But, what about the oversight issue here? Shouldn't the creditors have some kind of responsibility to make sure their money isn't lining pockets? Aren't there often decisions where the original stockholders get some equity along with an arrangement to pay back some of the debt on a schedule?

Any failure of secured creditors to exercise oversight does not negate their priority claim to the assets of the debtor corporation in bankruptcy. The responsibility for oversight lies with the shareholders and their representatives (i.e. the company's board of directors).

In Chapter 11, the shareholders of course retain their shareholders' equity, and the court will approve a debt repayment structure (typically also approved by a creditors' committee) that will enable the company to keep operating. But if the company fails and has to stop operations, it will go into Chapter 7. In that case the shareholders move to the very back of the line in terms of being able to recover any money from the assets of the corporation.

Also, what about the PR? MCI has managed to make even more enemies with this. The rich guys who ran the company (into the ground) ran off with hundreds of millions of dollars. The rich guys who gave the company the money to waste now get the company because it isn't paid back.

If company managers can be shown to have personally benefitted either through fraud or gross mismanagement, they are arguably liable to repay that money to the company for distribution to creditors and shareholders -- assuming the bankruptcy trustee pursues litigation against them to recover the money, and prevails against them in those claims.

And everybody on top wonders why people are slow to go back to stock investing.

Perhaps, but that has no bearing on the priority of payments to secured creditors.

Im a data guy who took over (under duress) my companies floundering voice group to try and fix the problems.

In the year I have spent working with the phone service providers (at&t, mci, nextel, sprint, etc) and the equipment manufacturer avaya/lucent, I have determined that the ENTIRE voice industry is either run by the MOB or satan himself.

I am not kidding when I say that EVERY day since Ive taken over the voice side of the house SUCKS. Just talking about it sends me into a rant. My Avaya sales executive is to the point he may start wearing a flame retardent suit when he comes to visit after multiple hour long flame sessions.

I need to go have a smoke now...

AT&T had to pay for their infrastructure.

AT&T inherited a basic infrastructure (paid for by you and me), they only paid to upgrade it when the market forced them to.

Every business' assets are paid for via their customers (accept for the crooked ones).

AT&T had a little help from the taxpayers, only they were Ma-Bell at the time. They had a guaranteed income and profit for quite a while before they actually put any of it back into the network.