A settlement could remove the last major obstacle that the company, now known as MCI, faces in persuading a bankruptcy court to approve the long-distance carrier’s financial reorganization after a ruinous accounting scandal.
U.S. Bankruptcy Judge Arthur Gonzalez said the talks between MCI and two groups holding close to $1 billion in combined claims against the company appeared to be showing enough progress to allow the parties another day to negotiate.
One of the groups, owners of about $750 million worth of a lower-class of debt, would be snubbed entirely by the reorganization plan currently on the table, while the other group has been offered payment of 36 cents on the dollar.
None of the parties would say how much either group would be paid if a settlement is reached.
The hearing is scheduled to resume Tuesday.
Despite recent angry exchanges over allegations that MCI has disguised its long-distance calls to avoid fees that local phone companies are paid to connect such calls, the company’s accusers say they won’t attempt to block the reorganization with those grievances.