WilTel's First Transaction (A.03-10-032)

On April 22, 2002, old WCG filed for bankruptcy with the United States Bankruptcy Court for the Southern District of New York (Bankruptcy Court). On September 30, 2002, the Bankruptcy Court approved a plan of reorganization (POR) for old WCG. The POR provided for the creation of new WCG, a new holding company, and the transfer of the ownership of WTC from old WCG to new WCG. Under the POR Leucadia acquired 44%, and bondholders of old WCG received 54%, of new WCG's common stock. No single bondholder received more than five percent of new WCG's common stock. Two percent of new WCG's common stock is reserved for distribution in a settlement of a class action suit brought by holders of old WCG's preferred and common stock.

WTC informs this Commission that the transaction did not and will not impair or jeopardize its provision of service to the public. WilTel also informs us that there were no changes in rates, terms or conditions of service as a result of the transfer. It further represents that the long-term effect will be to enhance WTC's access to capital. WTC states that, while there were management changes as a result of the transaction, it retained executives and managers with experience in telecommunications.