MCI, the bankrupt US telecoms firm once known as Worldcom, could run into trouble with the sale of its stake in Brazil's Embratel phone operator.
MCI says it made the right choice over the Embratel sale
MCI announced on Monday it had agreed to sell the Embratel stake to Mexico's biggest phone firm, Telmex, for $360m (£198m).
But disappointed Brazilian bidders said they had offered $200m more, and may challenge the sale in the US courts.
MCI sold the Embratel stake as part of its efforts to emerge from bankruptcy.
It is trying to cut debt so it can put forward a convincing case to the bankruptcy court.
Worldcom went bust two years ago with an $11bn hole in its accounts, setting a record for a US firm.
A consortium of three Brazilian firms have said they bid $550m for MCI's stake in the Brazilian long-distance phone firm Embratel.
The consortium has not issued an official response to MCI's decision, but people linked to it have told reporters it may well protest to the US bankruptcy court.
MCI might then find itself having to justify taking a lesser bid which could be seen as short-changing its creditors.
"It is not the kind of competition that a US court would be able to consider fair," a person linked to the Brazilian bidders told the Reuters news agency.
The defeated consortium was made up of three mobile phone companies - Brasil Telecom Participacoes, Telemar, and the Brazilian branch of Spanish firm Telefonicia.
MCI has defended its decision to accept the bid from Telmex, owned by entrepreneur Carlos Slim.
The firm said: "The Telemex bid was assessed by factors including valuation, likelihood of regulatory approval and anticipated time of close." It added it "continues to act in the best interests of its creditors".
MCI owns a 19.3% stake in Embratel which confers control of the company through 51% of the voting rights.
The firm is believed to be aiming to emerge from bankruptcy as soon as next month.