WorldCom Lawsuit

By: Associated Press

Updated: Mon 11:45 AM, Jul 15, 2002

More problems for WorldCom. A group of 25 banks is suing the telecom giant, saying the company defrauded them of nearly two and a-half billion dollars.

The banks say the fraud happened six weeks before WorldCom publicly announced four billion dollars in accounting irregularities.

A judge denied the banks' request to immediately freeze $2.65 billion of WorldCom's assets.

WorldCom got the money in a credit agreement signed last year with 27 banks. The company would be allowed to borrow, repay and borrow again up to $2.65 billion within a year.

The banks say they wouldn't have agreed to the loans if they knew about WorldCom's accounting problems. Two of the 27 banks are not part of the lawsuit.

Art Demo at Aldersgate

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