Internet backbone provider Level 3 Communications has agreed to acquire the bulk of the assets of network provider\u00a0Genuity, which has filed for bankruptcy, the companies announced Wednesday.Level 3 will pay as much as $242 million in cash and assume a significant portion of Genuity's long-term operating agreements, according to a statement from the companies. The deal must be approved by regulatory agencies and a bankruptcy court and is expected to close in the first quarter of 2003.Also Wednesday, Genuity filed voluntary petitions for reorganization under Chapter 11 of the U.S. bankruptcy code, the statement said. The cash on Genuity's balance sheet, together with Level 3's cash payment, will be distributed to creditors of Genuity.Based in Woburn, Mass., Genuity was spun out of U.S. telecommunications carrier Verizon Communications Inc. according to the terms of the merger of Bell Atlantic and GTE that created Verizon in 2000. More recently, the company has been suffering financially amid a glut of capacity on backbone networks. In May, Genuity announced that it would cut as much as 30 percent of its workforce, or 1,200 jobs.Level 3, in Broomfield, Colorado, will acquire Genuity's network transport business as well as its dedicated and dial-up Internet access operations. It also will take over Genuity's managed services business, which it will combine with its iStructure subsidiary but continue to operate under the Genuity brand.Genuity's biggest customers are Verizon and AOL, according to the statement. Verizon has executed a new multi-year contract to buy wholesale dial-up, transport and other services from Level 3, which should take effect when the acquisition closes.