WorldCom creditors strike bankruptcy deal

WorldCom Inc.’s creditors reached a breakthrough settlement early Tuesday, putting the nation’s second-largest long distance company on a fast track to emerge from bankruptcy as soon as this fall.

The deal will allow the company, now doing business as MCI, to avoid a lengthy and contentious hearing on its proposed plan of reorganization. The plan had already won the support of a majority of the company’s creditors, but two groups of holdouts were preparing to vigorously oppose it in U.S. Bankruptcy Court of New York.

Under the terms of the deal, the two groups will be paid nearly $460 million to satisfy part of the debts they’re owed by the company.

Telecommunications

Sprint expands service to small U.S. businesses

Sprint Corp. has expanded its local phone service to small businesses in most of the United States, the telecommunications giant announced Tuesday.

Sprint said it would offer bundled plans that include local and long-distance services to businesses in 34 states and the District of Columbia — about 80 percent of the country. The announcement followed a recent Federal Communications Commission order that essentially preserved that kind of telephone competition.

The Overland Park-based company already had announced plans to offer local phone service to residential customers in about 80 percent of the country. Sprint previously offered local phone service to just 5 percent of the country.

Technology

K.C. to lose Gateway jobs

Gateway Inc. plans to eliminate 850 jobs in South Dakota and Kansas City, Mo., a company spokesman said Tuesday.

The layoffs would occur within the next two months, said Dave Hallisey, and involve 650 jobs in Sioux Falls, S.D., 100 in North Sioux City, S.D., and 100 in Kansas City, Mo.

The announcement comes one week after the company said it would close its Hampton, Va., plant and lay off 450 people there.

The company has cut jobs as part of a makeover that includes expanding its product line beyond computers to televisions and digital cameras in an effort to return to profitability after two years of losses.