KPNQwest survives shutdown threat (no. 94)
The Telco which cried Wolf
The latest threat to pull the plug on KPNQwest's pan-European network appears to have been averted.
Alcatel reportedly threatened to withdraw support for KPNQwest's network unless the bankrupt operator stumped up E15 million.
However, the receiver said that Alcatel - which is reportedly owed E100 million in total - is no longer demanding the cash, according to a report on AFX.
And some of KPNQwest's customers have coughed up enough cash to keep the network going - for the time being at least.
So KPNQwest lives to fight another day.
Elsewhere, a group of 95 former shareholders of Global TeleSystems, Inc. (GTS) - the carrier which owned the Ebone network before KPNQwest acquired it in March 2002 - has filed a fraud lawsuit against four senior executives.
The lawsuit was filed earlier this month in the Southern District of New York and alleges that those involved issued a series of "false and misleading statements", and paid themselves salaries and bonuses "equal to approximately 52 per cent of the total market capitalization of the company as of the date they were signed."
According to the lawsuit: "Although Defendants received millions of dollars in bonuses and salary for their 'successful' completion of the GTS restructuring, GTS stockholders did not share in this 'success'.
"In fact, although Defendants repeatedly assured Plaintiffs - up to the conclusion of the Period - that the restructuring would benefit all 'stakeholders', including 'equity holders', the restructuring ultimately resulted in the stockholders receiving nothing, following GTS's sale of Ebone to KPNQwest in a prepackaged bankruptcy."
The shareholders are demanding damages. ®