Covad Files Bankruptcy Plan
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The parent company of Covad Communications late Monday announced that, as expected, it has filed its plan of reorganization and disclosure statement with the U.S. Bankruptcy Court for the District of Delaware.
In accordance with its previously disclosed plans, the troubled data competitive local exchange carrier (DLEC) now has substantial breathing room to turn its operations profitable.
Holders of a majority of the principal amount of Covad's bonds have agreed in writing to vote in favor of the plan of reorganization that would eliminate $1.4 billion in long-term debt by January 2002 if timely court approval is obtained.
"The filing of these documents is a milestone for Covad as it brings the company closer to eliminating its $1.4 billion in long-term debt," said Charles E. Hoffman, Covad's president and chief executive officer. "Most importantly, this filing has no effect on the operations, customers, nationwide network or employees of our operating subsidiaries, which provide DSL services and were not included in the Chapter 11 filing."
Covad Communications Group, Inc. filed its Chapter 11 petition on August 15, 2001, in the U.S. Bankruptcy Court for the District of Delaware.
Covad recently reported a second quarter loss from operations of $141.8 million, or $1.01 per share, on revenue of $87.1 million.