NEW YORK (CNNfn) - Battered telecommunication firm WorldCom won court approval Tuesday to spend up to $25 million on retention bonuses.

Over the objection of one creditor, SBC Communications (SBC: Research, Estimates), U.S. Bankruptcy court judge Arthur Gonzalez approved the plan, which the company argued is necessary to retain key employees during its reorganization.

"This is an appropriate use of the debtor's assets to enhance the value and benefit the estate," Gonzalez said in his decision.

WorldCom will use the money for incentives to retain 325 employees, mostly sales and service people in its MCI and network and products services units.

Clinton, Miss.-based WorldCom filed for the largest bankruptcy in U.S. history in July, with some $40 billion in liabilities. The company is the No. 2 U.S. long-distance telephone carrier and one of the world's largest movers of Internet traffic.

The company sank after revelations that it improperly booked $3.85 billion in expenses. After filing for bankruptcy, the company admitted finding another $3.8 billion in accounting errors, bringing to total to $7.68 billion.

Company officials have said they hope to emerge from bankruptcy protection in the middle of 2003.