A group of Excite@Home’s largest creditors have formed a committee urging the bankruptcy court to force the broadband provider to withhold its services from cable company clients in order to elicit a higher price for its assets.
Excite filed for bankruptcy protection three weeks ago, at which point controlling shareholder AT&T – one of the cable firms dependent on Excite to supply its subscribers with high-speed web services – offered $307 million for its network assets [WAMN: 01-Oct-01].
However, the creditors, who hold around $747m of bond claims against Excite, claim that AT&T’s offer is far too low, and in a filing with the bankruptcy court on Friday urged the broadband firm to “refuse to provide service unless the cable companies agree to much better terms or buy the company for a price acceptable to creditors.” Excite wants AT&T to pay $1 billion for the assets.
When filing for Chapter 11, Excite vowed to continue its services uninterrupted, though subsequently refused to take any more new customers from its cable company clients – including Cox Communications and Comcast Corporation – to save cash [WAMN: 11-Oct-01].
However, last week it reached a deal with its cable partners to resume accepting new subscribers in return for higher payments (though by how much is unknown).
News source: Wall Street Journal