Jun 1, 2001 : PSINet Files For Bankruptcy Protection
📅 - Global Web hosting company and ISP PSINet did what most considered to be the inevitable today, filing for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York.
Four Canadian subsidiaries also filed for protection.
The company said that subsidiaries in Asia, Europe, Latin America and the company's Metamor consulting business were not involved in the filings.
PSINet also announced it was selling its Canadian operations and facilities to Canadian telecom TELUS. The proposed purchase, however, is subject to a number of conditions, including regulatory approval.
"Our existing capital structure did not permit us to respond to the rapid changes in our markets. We expect that the steps we are taking today will provide us with the flexibility and time to explore all strategic alternatives while we continue to deliver the reliable service upon which our customers depend," said Harry G. Hobbs, President and CEO of PSINet.
Hobbs said the company would ask the courts for permission to continue paying employee medical, retirement and other benefits. The company employs approximately 3,000 people worldwide.
At the time of the filing for protection, PSINet had total assets of $2.2 billion and total liabilities of $4.3 billion, of which $2.9 billion is bond debt. The company said it expects operations to continue.
"We are extremely grateful to the customers, employees and other stakeholders who have supported the company through these challenging times, and we look forward to continuing to serve them during this period of reorganization," Hobbs said.
The Nasdaq halted trading of PSINet shares in early April when the company said it might be forced to file for bankruptcy protection as a result of Q4 restructuring. As a result, the company said that shares in PSINet likely had little value.
PSINet has been stuck in a financial downward spiral since last year, when the company spent approximately $2 billion to purchase IT consulting firm Metamor, and a substantial stake in Xpedior, an e-commerce consulting company.
Four Canadian subsidiaries also filed for protection.
The company said that subsidiaries in Asia, Europe, Latin America and the company's Metamor consulting business were not involved in the filings.
PSINet also announced it was selling its Canadian operations and facilities to Canadian telecom TELUS. The proposed purchase, however, is subject to a number of conditions, including regulatory approval.
"Our existing capital structure did not permit us to respond to the rapid changes in our markets. We expect that the steps we are taking today will provide us with the flexibility and time to explore all strategic alternatives while we continue to deliver the reliable service upon which our customers depend," said Harry G. Hobbs, President and CEO of PSINet.
Hobbs said the company would ask the courts for permission to continue paying employee medical, retirement and other benefits. The company employs approximately 3,000 people worldwide.
At the time of the filing for protection, PSINet had total assets of $2.2 billion and total liabilities of $4.3 billion, of which $2.9 billion is bond debt. The company said it expects operations to continue.
"We are extremely grateful to the customers, employees and other stakeholders who have supported the company through these challenging times, and we look forward to continuing to serve them during this period of reorganization," Hobbs said.
The Nasdaq halted trading of PSINet shares in early April when the company said it might be forced to file for bankruptcy protection as a result of Q4 restructuring. As a result, the company said that shares in PSINet likely had little value.
PSINet has been stuck in a financial downward spiral since last year, when the company spent approximately $2 billion to purchase IT consulting firm Metamor, and a substantial stake in Xpedior, an e-commerce consulting company.
Reads: 2003 | Category: General | Source: TheWHIR : Web Host Industry Reviews
URL source: http://www.thewhir.com/marketwatch/psinet601.cfm
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