WorldCom filed for bankruptcy in 2002 after an accounting scandal involving billions of dollars.
The company had grown rapidly through acquisitions, including its purchase of MCI in 1998. Executives later admitted that ordinary operating expenses had been improperly recorded as capital investments, making profits appear much larger than they really were.
WorldCom filed for Chapter 11 protection on July 21, 2002, with reported assets of about $103.9 billion. At the time, it was the largest corporate bankruptcy in U.S. history, although Lehman Brothers later surpassed it in 2008. The company emerged as MCI in 2004 and was later acquired by Verizon.
WorldCom is often confused with Enron, which collapsed earlier because of a different accounting scandal. The WorldCom case centered particularly on improperly capitalized line costs and became one of the major corporate-fraud scandals of the early 2000s.