NEON Communications denies potential bankruptcy
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NEW YORK, June 7 (Reuters) - Networking company NEON
Communications Inc. on Thursday said it was not
seeking bankruptcy protection after the issue was raised by a
supplier and NEON's stock fell by about 16 percent.
NEON shares were down 99 cents, or 16 percent, at $5.15 on
the Nasdaq exchange, after earlier falling as low as $3.40.
Privately held Fiber Optek said in a statement on Thursday
that it was filing liens against NEON to confirm its position
as a secured creditor, citing an April 12 filing by NEON with
the Securities Exchange Commission that said the company might
have to file for bankruptcy if it did not obtain additional
financing.
NEON, which called the Fiber Optek release "materially
misleading," said it had recently obtained $28 million in
financing. The company added that Fiber Optek's liens are on a
"small portion" of NEON's network, and that it intends to seek
damages against Fiber Optek.
Neither company returned calls seeking comment.
Westborough, Massachusetts-based NEON said the liens were
an attempt "to pressure NEON to settle disputed contractual
claims" after NEON terminated its agreement with Wappingers
Falls, New York-based Fiber Optek, which designs and installs
fiber optic networks.
The NEON SEC filing, a shelf registration to sell up to $25
million in stock, securities and warrants, reads, "We have
experienced significant net losses throughout our history, and
are currently experiencing cash flow problems. As a result, we
will need additional financing in order to fund our operations
and carry out our business plan, and if we are unable to obtain
this financing, our business will be severely harmed and we may
be required to seek protection from our creditors under the
federal bankruptcy laws."
REUTERS
Rtr 18:02 06-07-01 |
