FLAG Flies Into Bankruptcy
And the hits just keep on comin'...
From LightReading: lightreading.com
FLAG Flies Into Bankruptcy
APRIL 12, 2002
FLAG Telecom (Nasdaq: FTHL), a Bermuda-based carriers' carrier, filed for Chapter 11 bankruptcy protection today (see FLAG Files Chapter 11 ).
Earlier this week, the company's board approved a proposal that would pay its trade creditors and equipment suppliers, either through ordinary business or through venture financing. As usual in restructuring cases, however, FLAG's proposal would mostly likely wipe out the value of the common stock (see FLAG Board OKs Restructuring ).
The company's equipment suppliers include Ciena Corp. (Nasdaq: CIEN - message board), whose CoreStream and CoreDirector systems are in FLAG's North Asia Loop, a submarine network spanning Japan, Hong Kong, Taiwan, and Korea. Startup Centerpoint Broadband Technologies Inc. also counted the company among its customers, supplying several FLAG metro networks in North America and Europe with its Celerity CP 3200 (formerly the Zaffire Z3000) DWDM systems (see CenterPoint Raises FLAG ). In the past two years, FLAG has bought equipment from Alcatel SA (NYSE: ALA) and Juniper Networks Inc. (Nasdaq: JNPR) as well.
FLAG has assets totaling $3,335,017,000 and debts totaling $2,598,040,000, according to its bankruptcy petition filed in New York.
The filing lists FLAG's top creditors as The Bank of New York, York Capital Management, and Colonial Management Associates. Their claims total $564 million, $48.1 million, and $40 million, respectively.
Verizon Communications Inc. (NYSE: VZ - message board) is FLAG's largest shareholder, holding 18.6 percent of its common stock, the filing states.
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