PSINet files Chapter 11
Troubled ISP, PSINet Inc, has finally admitted defeat and announced that it and 24 of its operating subsidiaries in the US have filed for Chapter 11 bankruptcy protection.
Four Canadian subsidiaries have also sought similar protection.
The company said none of its operating subsidiaries in Asia, Europe, Latin America were affected by today's filings.
At the time of the filing, PSINet had total assets of $2.2 billion and total liabilities of $4.3 billion, of which $2.9 billion is bond debt. With £300 million cash in the bank and trading conditions worsening, PSINet is unable to service its debt burden.
In a statement, Harry G Hobbs, president and CEO of PSINet, said: "Our existing capital structure did not permit us to respond to the rapid changes in our markets.
"We expect that the steps we are taking today will provide us with the flexibility and time to explore all strategic alternatives while we continue to deliver the reliable service upon which our customers depend.
"We are asking the Courts for permission to continue to pay employees in the normal course and to continue their medical, retirement and other benefits," Hobbs said. ®