This is what I read:True or False?




XO Expects to File for Bankruptcy: Business Week

February 22, 2002 -- (WEB HOST INDUSTRY REVIEW) -- Voice and data services company XO Communications Inc. (xo.com) is expecting to file for Chapter 11 bankruptcy protection within the next two weeks, Business Week magazine reported Thursday.

XO said on Nov. 29 that buyout firm Forstmann Little and Mexican telecom Telefonos de Mexico S.A. de C.V. each planned to invest $400 million in the company. But XO said the restructuring, if it happens, would basically leave current stockholders with nothing.

Business Week reported that XO is filing for bankruptcy protection to convince debtholders to agree on the restructuring plan.

"It could happen in days; it could be two weeks," a source near XO told the magazine.

Originally posted by Cephren
This is what I read:True or False?

XO Expects to File for Bankruptcy: Business Week


I'd have to speculate that Business Week is generally a reliable source, possibly more so than postings on WebHostingTalk ;)

It looks like they need to go to Chapter 11 in order to force their shareholders and bondholders to accept the $800M restructuring they setup a couple of months ago. That would be the deal that erases all value of the common stock and hands the company over to two other entities, each investing $400M. I suppose the bankruptcy will erase a lot of their debt, as well.

It's not a pretty scenario but it seems to be where a lot of the new telecom companies are these days. Now, what does this have to do with Web hosting? Oh yeah, XO used to be Concentric which bought out 9NetAve and a few others. Gee, I almost forgot.

Kevin