WorldCom became the largest bankruptcy of the dot-com crash in 2002.
The telecommunications company filed for Chapter 11 bankruptcy protection on July 21, 2002. The filing followed the discovery that executives had improperly classified billions of dollars in operating expenses as capital expenditures, making the company’s financial position look stronger than it was. The accounting scandal destroyed investor confidence and caused severe losses for shareholders.
WorldCom’s bankruptcy occurred during the broader collapse of technology and telecommunications stocks that followed the dot-com boom. Enron’s bankruptcy in late 2001 is often more prominent in public memory, but WorldCom’s filing was larger at the time. The company later emerged from bankruptcy as MCI in 2004, before Verizon Communications acquired MCI in 2006.