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It was d�j� vu all over again in the courtroom of Arthur J. Gonzalez, U.S. bankruptcy judge for the Southern District of New York. With a standing-room-only audience, counsel for the debtor in the largest bankruptcy filing in U.S. history made a case Monday afternoon for an interim financing plan that would allow the company to stay in business while it worked to reorganize its operations. Except this time the company was not Enron Corp., the beleaguered energy company whose bankruptcy filing in December at the time gave it the dubious honor of the nation’s biggest bankruptcy. This time the company was WorldCom Inc., the beleaguered telecommunications company, whose filing for Chapter 11 bankruptcy protection on Sunday bumped Enron from the top spot. The move was widely expected, since the company disclosed late last month that it had improperly hidden more than $3.8 billion in expenses. Both cases are now pending before Gonzalez, thanks to the vagaries of the court’s “wheel” system that randomly assigns matters to the eight bankruptcy judges in Manhattan in order of filing. Tina L. Brozman, a former chief judge of the Manhattan bankruptcy court who is now a partner with Bingham McCutchen, said Gonzalez had the option of asking that the case be reassigned if he felt overburdened. But Gonzalez kept the case, even with Enron and several other enormous bankruptcies on his plate, including XO Communications and Reliance Group Holdings Inc. “We were a little surprised,” admitted Douglas P. Bartner, a partner at Shearman & Sterling who represents the debtor in possession lenders. “But we are glad to have him.” Bartner, who also represents the DIP lenders in the Enron matter, said he thought the earlier case “may have seen its peak of activity.” Still, “it’s an impressive workload,” he added. Bankruptcy lawyers agreed that the WorldCom case was a hard one to pass up. “Judges are made by two things,” said Evan Flaschen, a partner with the Hartford, Conn., office of Bingham McCutchen, “the cases they are assigned and how they handle them.” To manage his docket, Gonzalez would probably pass along some other cases that take up time but are not as big, said Flaschen, who has several clients involved in the WorldCom bankruptcy. He also said that WorldCom may not be as much of an administrative burden as Enron. Although WorldCom’s more than $107 billion in assets dwarfs those of Enron, the complexities of Enron’s finances, with its hundreds of off-shore partnerships, makes the Enron case exceptionally complicated. At least initially, the WorldCom bankruptcy also looks to be less contentious than Enron’s. Before Monday’s proceeding — known in industry parlance as the first-day hearing — WorldCom had already lined up interim debtor in possession financing of $750 million. The DIP lenders — Citigroup, J.P. Morgan Chase and GE Capital Corp. — have pledged additional loans up to $2 billion. WorldCom’s holders of $28 billion in bonds have also publicly announced their cooperation, at least for now. Indeed, the hearing went smoothly, with the judge approving every one of the myriad motions presented by debtor’s counsel, Marcia Goldstein and Alfredo Perez of Weil Gotshal & Manges. “Except for the numbers, it was very routine stuff,” said Robert Rosenberg, a partner with the New York office of Latham & Watkins, whose clients include several WorldCom creditors. As Goldstein herself acknowledged, the numbers are large, although as she also pointed out, “Your honor is used to large numbers.” WorldCom has publicly announced it expects to emerge from bankruptcy in nine months to a year. Shearman’s Bartner said that “people are thinking a year.” Given WorldCom’s substantial assets, including MCI Communications, the nation’s second-largest long distance carrier, lawyers said it could realistically expect to come out of bankruptcy as a viable company. SKILLED ADMINISTRATOR Most everyone agreed that if anyone could simultaneously oversee the two largest bankruptcies in history, it was Gonzalez. Even before Enron, he had a reputation as a good judge and administrator, Bingham McCutchen’s Flaschen said. And the judge’s handling of the Enron case has only demonstrated that fact further, he added. Gonzalez assumed the bench in 1995. Before that, the Fordham University School of Law graduate was the U.S. Trustee for Region 2, which covers the 2nd U.S. Circuit Court of Appeals. The final hearing on the DIP financing has been scheduled for Sept. 4. Additionally, the judge said he was setting aside Tuesdays for WorldCom matters.

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