MCI Clears the Decks

According to the filing Friday, the company has recently sold a substantial portion of Ebbers' properties, after the former chief defaulted on his loan payments.

The company, then operating as WorldCom, gave Ebbers personal loans during the boom era totaling $408 million to keep the exec from selling his stock. When Ebbers left the company, he pledged several land and business holdings to secure the loan. But Ebbers stock, like that of other investors, was left worthless in the bankruptcy case. And in April, Ebbers failed to pay his first installment and the company took control of his pledged assets.

Last month, the company received $35 million for the sale of Ebbers' Douglas Lake property in British Columbia, once known as the world's largest cattle ranch. It has been reported that Ebbers paid $100 million for the property in 1998.

A year ago, MCI sold Ebbers' Intermarine yacht sales business for $17.4 million. The company still has the option to sell Ebbers' stake in the Joshua timberland properties in Tennessee, Mississippi, Louisiana and Alabama.

Friday's filings mean the end of the nation's largest-ever corporate bankruptcy case is now in sight. MCI had been scheduled to return to publicly traded status by the end of last month, but on Feb. 11 MCI was granted a 60-day extension to complete its paperwork. The Ashburn, Va., phone giant must yet file an audited 2003 annual report by April 30 before gaining bankruptcy court clearance for emergence from Chapter 11.

"We are working diligently on 2003 and are in the process of auditing the results and preparing the filings," Blakely said last month at the time of the extension. "We will review all of our filings to ensure accuracy, quality and transparency."

The reappearance of the nation's No. 2 long-distance service provider in an ever-tightening telecom market has been eagerly anticipated by investors ever since the company's June 2002 collapse. Some investors have said they believe MCI could be a takeout target as the rising stock market makes industry consolidation seem more likely.