Mobile messaging company Arch Wireless
, has filed for Chapter 11 bankruptcy protection and
reached agreements with creditors to restructure its debt.
“In time we expect to emerge as a financially sound and stable operating entity and continue to pursue opportunities in the growing market for two-way messaging
and wireless mobile data.” said C. Edward Baker Jr., chairman and CEO of the Westborough, Mass., company.
Arch has received $50 million in debtor-in-possession financing from a group of banks led by TD Securities and has $50 million in cash — enough, it believes, to run
the business during reorganization.
Key to the recovery plan is the consent of creditors to accept new notes and equity securities. Arch will file a detailed reorganization plan with bankruptcy court
officials by Jan. 15.
The Chapter 11 filing comes less than a month after creditors filed an involuntary bankruptcy petition against the company’s Arch Wireless Communications unit.
That unit also sought voluntary court protection in U.S. Bankruptcy Court in the Western Division of Massachusetts.
Arch delivers messages to pagers, personal digital assistants and cell phones in all 50 states, the District of Columbia, Puerto Rico, Canada, Mexico and in the
Shares of ARCH, which was delisted from the Nasdaq earlier this year after failing to meet minimum price requirements, rose 0.0076, or 52 percent, to 0.022 on
the over-the-counter market. In the last 52 weeks, the issue has ranged from 0.01 to 2.3125.
Ironically, Arch was able to grow significantly in late 2000 by acquiring Paging Network (PageNet), a Dallas wireless messaging company, that was in Chapter 11.