WorldCom Lawsuit

By: Associated Press
By: Associated Press

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.

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