Winstar files for Chapter 11.Winstar Communications Inc. has filed for Chapter 11 bankruptcy protection, the company announced last week. The telecommunications company, which, in the heady days of 2000, had wired so many of the city's class A buildings, has seen its revenue drop off dangerously since the dot-com implosion implosion /im·plo·sion/ (im-plo´zhun) see flooding. im·plo·sion n. 1. . "We expect to emerge from the Chapter 11 process with a new balance sheet that has significantly less debt, thereby dramatically lowering our interest payments and providing us with more operating flexibility," said William J. Rouhana, Winstar's chairman and chief executive officer. Last week, the company also filed a $10 billion lawsuit against Lucent Technologies Inc. for breach of contract. Both the suit and the bankruptcy filing are before the U.S. Bankruptcy Court bankruptcy court n. the specialized Federal court in which bankruptcy matters under the Federal Bankruptcy Act are conducted. There are several bankruptcy courts in each state, and each one's territory covers several counties. for the District of Delaware. Winstar claims that Lucent reneged on an agreement to provide financing, including a more than $90 million payment that was due March 30. The breach of agreement has injured Winstar's ability to complete its broadband network, according to Winstar statements. A Lucent Technologies spokeswoman said the lawsuit is "absolutely frivolous and without merit." "We did not breach any contract. The truth is they are in breach of their financial covenant to us," said Mary Lou Ambrus. Winstar said its ability to emerge from bankruptcy is not contingent upon its winning the lawsuit against Lucent. Winstar has emphasized that the bankruptcy filing will not impact day- to-day operations with regard to employees, customers and general business operations. The company has arranged for debtor-in-possession financing Debtor-in-possession financing New debt obtained by a firm during the Chapter 11 bankruptcy process, Federal Bankruptcy Rule 4001 (c)(1). This financing is unique because it is secured, that is, it has priority over existing debt, equity and other claims. with an initial commitment of $75 million, from a consortium of banks comprised of CIBC CIBC Canadian Imperial Bank of Commerce CIBC Centres Interinstitutionnels de Bilan de Compétences CIBC Commonwealth Institute of Biological Control (Trinidad) CIBC Commercial International Brokerage Company , Citicorp, Credit Suisse First Boston Credit Suisse First Boston was originally the trading name of the Financière Crédit Suisse-First Boston, a London-based 50-50 investment banking joint venture formed in 1978 between the First Boston Corporation and Credit Suisse. , The Bank of New York The Bank of New York, abbrieviated to BNY, was a global financial services company that existed until its merger with the Mellon Financial Corporation on July 2, 2007.[1] The bank now continues under the new name of The Bank of New York Mellon Corporation. and The Chase Manhattan Bank The Chase Manhattan Bank, now part of JPMorgan Chase, was formed by the merger of the Chase National Bank and the Bank of the Manhattan Company in 1955. The bank is headquartered in New York City. . This commitment may be increased to as much as $300 million upon the satisfaction of certain conditions, according to company officials. "This financing will enable us to fund our business activities, pay employees and suppliers, and ensure that we can continue to meet your needs as we complete the restructuring process," according to company statements. Winstar also said that the bankruptcy filing will not impact pricing, or the products and services the company offers. "We have been building our broadband network for more than seven years, making us one of the most experienced and established companies in our sector. We are confident that focusing on the potential of our existing network, coupled with a more efficient organization, will allow Winstar to emerge from this process as a stronger company," said Nathan Kantor, Winstar's president and chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. . Winstar has more than 30,000 business customers and employs more than one million people. The company produced an annual revenue stream of more than $700 million in 2000. During the restructuring process, Winstar will focus on maximizing the untapped potential of the 140,000 addressable Reachable. When something is addressable, it can be identified and manipulated independently of its surroundings. For example, screen pixels and RAM memory are addressable. Each of the screen's picture elements can be individually turned on and off, and each of the memory's bytes can be businesses in the 4,800 buildings that are directly connected to our already existing, domestic built-out broadband network, Rouhana said. |
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