Axed WorldCom staff may lose severance pay-outs...

WorldCom employees recently made redundant by the scandal-struck telco may find themselves out of pocket should it go bankrupt.

It has emerged that the company changed its severance payments policy last month, before the fraud came to light, so that axed staff would receive their pay-off cheques in bi-weekly instalments rather than a one-off lump sum.

Some employees' cheques aren't due to be written until the end of this month which means they'll be clamouring for their money among all the other creditors should WorldCom go under.

One ex-employee is quoted in the Wall Street Journal as saying: "I think it's a very huge injustice and a kick in the face. We worked so hard for that company."

Meanwhile, the prospect of bankruptcy came one step closer yesterday as WorldCom failed to make a $74m coupon payment to bondholders.

It now has 30 days to come up with the money or it will officially be declared in default.

The company is also due to meet with its bank lenders in New York State Supreme Court today to contest an effort by the banks to freeze its assets, this morning's FT reports. If the banks succeed, the company will be forced into Chapter 11 bankruptcy protection.