March 4, 2002 -- McLeodUSA Incorporated, one of the nation's largest independent competitive local exchange carriers, announced that the bankruptcy court approved the disclosure statement in connection with its previously announced Plan of Reorganization. The disclosure statement was approved without objection, and McLeodUSA may now begin soliciting acceptances for its proposed Plan of Reorganization. The confirmation hearing on the Plan of Reorganization is scheduled for April 5, 2002.

The company also announced that the official creditors committee has expressed its strong support for the Plan of Reorganization and has furnished the company with a letter to the unsecured creditors recommending approval of the plan.

McLeodUSA believes that the approval of the disclosure statement is an important milestone in the company's recapitalization process. The company remains on schedule to complete its reorganization by the end of April 2002.

As previously announced, with the support of its Board of Directors, Secured Lenders, Forstmann Little & Co., the ad hoc committee of its bondholders and certain of its preferred stockholders, the company filed a pre-negotiated plan of reorganization through a Chapter 11 bankruptcy petition filed in the United States Bankruptcy Court for the District of Delaware. The company has signed lock-up and support agreements with stockholders holding approximately 45% of its Series A, Series D and Series E Preferred Stock, including funds managed by Forstmann Little & Co., to support the Plan of Reorganization. In addition, advisors to the ad hoc committee of the bondholders, have advised McLeodUSA that holders representing a total of approximately $1.2 billion of bonds, or 40% of the outstanding bonds, have expressed support for the reorganization plan. Included in the $1.2 billion are bondholders representing approximately $690 million, or 23%, who have signed lock-up and support agreements to vote in favor of the Plan of Reorganization.

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