Covad set to emerge from bankruptcy
 
|
|||
 | |||
|
The U.S. Bankruptcy Court of Delaware approved the business reorganization plan of national DSL provider Covad this week, a move that should allow the company to emerge from Chapter 11 bankruptcy debt-free on Dec. 20.
The reorganization allowed Covad to eliminate $1.4 billion in bondholder debt in return for $270 million and shares representing a 15% stake in the company.
Covad filed for Chapter 11 back in August, but had its reorganization plan already drawn up when it filed. The company had pre-negotiated an agreement with the majority of its bondholders and entered Chapter 11 to get the remaining bondholders on-board with the plan.
Customers should see no change in Covad services after the company emerges from Chapter 11, officials say.
Covad is the only one of the three large national DSL wholesalers still in operation. The other two, NorthPoint Communications and Rhythms NetConnections, both declared bankruptcy earlier this year and their assets were purchased by AT&T and WorldCom, respectively.
Covad has no plans to expand its national DSL network. Instead officials say the company will concentrate on adding customers in areas where it already provides service.
Related Links
