New name, new home, old debts

It has also appointed a new chief financial officer, Robert Blakeley.

The second-largest US long-distance telecoms operator last year filed the world's largest bankruptcy after a $9bn (�5.7bn) accounting scandal was unearthed.

The deal will see the company renamed as MCI and given over to its creditors, who are owed $3.5bn-4.5bn.

MCI is the name of its domestic long-distance telephone unit.

Under cowboy-booted former chief executive Bernie Ebbers, the company embarked on a debt fuelled acquisition spree that spectacularly imploded after accounting irregularities were exposed.

Debt deal

WorldCom collapsed under $41bn in debt when it filed for bankruptcy in July 2002.

Creditors of WorldCom will receive about 36 cents in the dollar on $26bn in debts, while creditors to subsidiaries MCI and Intermedia will receive 80 and 94 cents respectively on $4bn of debt.

Shareholders in the company will receive nothing.

About 90% of the creditors approved the reorganisation, which still needs to be passed by the bankruptcy court.

New look

The renamed company will launch a global advertising blitz to win over sceptics.

"With established brand equity and a name that stands for integrity, innovation and value, we're ready to regain our leadership position in the marketplace," company chairman and chief executive Michael Capellas said in a statement.

New chief financial officer Robert Blakely previously held that position at US companies Lyondell Chemical and Tenneco.

MCI will be relocated to Ashburn, Virginia, from Clinton, Mississippi.