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A committee of MCI Group bondholders has hired the New York-based consulting firm Zolfo Cooper to look out for their interests in the WorldCom Inc. bankruptcy proceedings, lawyers for the group said Monday. Stephen Cooper, managing principal of the firm, is the interim chief executive and chief restructuring officer at bankrupt energy trader Enron Corp., and has worked on other large-scale bankruptcies, including Federated Department Stores Inc. and Trans World Airlines. Cooper has ongoing obligations to Enron, but will also have a role in the WorldCom case. While MCI has a relatively small portion of WorldCom’s more than $40 billion in debt, the subsidiary’s bondholders say that many of the company’s most valuable assets reside at MCI. The group has said it wants to ensure that those assets are used to repay MCI’s claims before they are applied to WorldCom’s other debts. Because the MCI bondholders do not constitute an official committee, they won’t need official approval from U.S. Bankruptcy Judge Arthur Gonzalez to retain Zolfo Cooper. Houlihan Lokey Howard & Zukin is advising the official committee of WorldCom’s unsecured creditors, which represents bondholders, banks and vendors. Lawyers for WorldCom’s unsecured creditors committee have said they intend to hire a forensic accountant to examine the company’s bookkeeping irregularities, which now exceed $7 billion. A source said the committee is considering Annapolis, Md.-based FTI Consulting Inc., among others. WorldCom is trying to finalize its debtor-in-possession financing, which could reach $2 billion, tying Kmart Corp. for the largest DIP ever. The final hearing to approve the DIP could be moved from Sept. 4 to Sept. 24, according to lawyers working on the case. Because of summer schedules and the approach of the Labor Day weekend, WorldCom and its banks need more time to arrange the syndication of the loan, the lawyers said. The company must produce cash flow projections and a two-year business plan before the loan can be syndicated, or before management can even be sure how much money it needs. WorldCom received a $750 million interim installment of the loan in July. Copyright (c)2002 TDD, LLC. All rights reserved.

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