IN LIFE, WorldCom tormented its rivals by wrapping the planet in telecom capacity, thus depressing prices, and then lying about its profits, which made everybody else look like slackers.

In death, or something like it, WorldCom still weighs on its enemies.

Having hung on to some $20 billion in yearly revenue, the company is moving through a debt-cleaning machine known as the U.S. Bankruptcy Court in lower Manhattan.

Verizon Communications, SBC Communications and other competitors worry that what emerges will be an intact, buff WorldCom, shorn of legal and financial sins, ready to wreak new havoc.

Verizon boss Ivan Seidenberg has said he is "fire-engine-red mad" about the idea that WorldCom and other bankrupt telecom companies could escape the chop shop. He wants a medieval, Arthur Andersen-style dismemberment for WorldCom, and you can't blame him.

Seidenberg's company didn't break the rules, didn't invest far beyond its means, didn't play footsie with Salomon Smith Barney's Jack Grubman and didn't inflate profits by $9 billion. So why should the company that did be resuscitated and, what's more, endowed by the courts with extraordinary power?

Verizon carries debt of $60 billion, a dead weight that cost it $3.4 billion in interest expense last year. A hypothetical, debt-free Verizon would have boosted profits many-fold, compared with those of the real McCoy.

For its size, WorldCom is even more in hock, owing $42 billion to bondholders, banks, equipment vendors and other creditors, according to bankruptcy records. WorldCom paid about $1 billion in interest last year, if that part of its income statement can be believed.

But there is a real chance, through the black alchemy of bankruptcy proceedings, that WorldCom will shrink its debt, keep most of its assets and re-enter the lists under the name of MCI, its best unit. Relieved of a $42 billion ball and chain, the company would be free to cut prices, raise capital and otherwise run circles around its law-abiding rivals.

This kind of result, many analysts believe, is partly responsible for the perennial problems of the airline industry.

Many airlines have been through bankruptcy in the past two decades, and many have come out of it with less debt and lower interest costs. When they do, they often kindle price wars, pressure other carriers and send other companies into insolvency and default. By and by, these companies, too, rise from the grave and haunt the righteous, renewing the misery.

This is made possible by Chapter 11 bankruptcy rules, which allow a busted corporation to stay whole, pour its balance sheet into an Osterizer and reappear as a new company that looks a lot like the old company, only with less debt and different ownership.

Verizon worries this will happen with Worldcom.

In bankruptcy, shareholders are wiped out and creditors trade bad debts for ownership stakes in the corporate carcass. The new owners can auction off the remains and split the proceeds or try to revive the company as a going concern, which often brings a higher payoff.

Of course, Seidenberg likes Plan A, which would sow salt in the fields of Clinton, Miss., WorldCom's home, and maybe let Verizon snap up some long-distance lines cheap. Creditors and WorldCom employees like Plan B, which would preserve jobs, revive the MCI name and offer the prospect of minting money while the rest of the industry staggers under debts.

This last idea has lighted a fire recently under the price of WorldCom bonds. Remember that present bondholders are WorldCom's future owners, and the more bonds you own now, the more stock you'll own in a post-bankruptcy enterprise.

The old WorldCom was such a colossal botch that bondholders and other creditors won't come close to getting all their money back. But in the past two weeks the bonds have popped in price, rising from 13.5 cents on the dollar (bonds with a face value of $10 million would sell for $1.35 million) to almost 20 cents Friday, according to bond dealer Debt Traders.

The bond buyers' hope is Seidenberg's fear. It is also the officially expressed fear of the Communication Workers of America, a union to which I, like most nonmanagement news employees at The Sun, belong.

The CWA, which unsuccessfully tried to organize parts of WorldCom, wants the government to end the company's federal contracts and liquidate it. As is often the case, a union is pro-jobs only as long as the jobholders pay union dues.

Unfortunately for Verizon, the CWA and everybody else who wants to euthanize WorldCom, the bondholders have the upper hand.