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.