Amid class-action lawsuits, complaints of service and management turmoil, ICG Communications Inc. this week filed voluntary petitions for Chapter 11 protection with the U.S. Bankruptcy Court for the District of Delaware.

The telephone services and infrastructure provider secured a $350 million loan from Chase Manhattan Bank, $200 million of which is available immediately. The remaining $150 million will be made available upon the satisfaction of certain conditions. ICG also said it has about $160 million cash on hand.

ICG will continue to maintain normal business operations for its nearly 10,000 customers nationwide, providing all products and services in accordance with regulatory requirements.

"This is a strategic step taken by the company as part of its on-going efforts to restructure and ultimately strengthen the company's balance sheet," said Randall E. Curran, chief executive officer, ICG. "We believe we'll be able to reposition ICG to be a profitable and competitive company well into the future."

Curran also said he believed his company had enough money to continue operations and move forward.

Curran inherited ICG's troubles in September when he took over for Carl E. Vogel, who had filled the position by ousted Shelby Ryan.

Though Chase Manhattan has come to ICG's rescue, one has to wonder if the firm is an attractive element for larger firms to pick it up. Once an Wall Street favorite who enjoyed a market capitalization of $2 billion and shares that traded as high as $32.95 last March, trading for shares of ICG was halted Tuesday at 31 cents.

Yankee Group's Joanna Makris, program manager of Communications Services for the New Economy, had said in September acquisition is a definite possibility, but declined to speculate as to who exactly is interested.

Makris said firms looking to build out their dials assets would make ICG very attractive. She also said that despite a litany of disgruntled customers, many of the major Internet service providers have been appreciative of ICG's service.

"There are serious concerns. It signals a harbinger of doom for voice-oriented CLEC's who haven't turned around," Makris said.

While that certainly may have been the case two months ago, November saw the NASDAQ dip below 3000 for the first time since the same period last year. Upon studying the markets, some analysts assert that competitive local exchange carriers like ICG aren't the only firms adversely affected by shrinking venture capital and waning investor confidence.

Michael Lehmann, an economics professor at the University of San Francisco, told InternetNews.com Tuesday the combination of companies pulling IPOs, massive layoffs and streamlining is an early indication that the market could be headed for a recession.

"I look at high-tech as the leading edge," Lehmann said. "My guess is that we're in for a dry spell. New firms are having difficulty getting funding because venture capital is drying up. Other straws on the camel's back are that oil prices are high, and costs are going north while revenues are going south."