PSINet names new CEO, prepares to restructure

Struggling PSINet Monday announced new management appointments, tapping Harry Hobbs to take over as CEO, and also outlined plans for a restructuring committee aimed at helping the Internet services company figure out if it can dig out of the financial hole it is in.

The Ashburn, Va., company was delisted from the Nasdaq stock market last week (PSINet delisted from NASDAQ), after announcing job cuts and a fourth-quarter loss of $3.2 billion, and after it issued word that it doesn't likely have enough money to keep operating. The possibility of selling all or part of the company is being considered, as are alternatives for restructuring its debts - however, even if such options are put into place it's still possible PSINet will run out of money, Monday's statement reiterated.

Besides repeating that its financial situation is bleak and announcing the appointment of Hobbs, PSINet says it also named Lawrence Hyatt as chief restructuring officer. That duty is added to Hyatt's tasks as executive vice president and CFO. He will work closely with bondholders and other creditors to try to get the company into better financial order.

Hobbs will also be focused on that goal. He previously served as the company's president and COO and has worked in recent months to streamline operations, the statement said. In his new duties, he will mostly focus on creating and implementing a business plan to take the company through its restructuring, PSINet says. He further has been named to the company's board of directors.

Besides Hobbs and Hyatt, Kathleen Horne, executive vice president and general counsel, will work closely on the restructuring.

PSINet further says Ian Sharp has been named chairman of the board of directors. He takes over for William Schrader, who had been chairman and CEO.

The IDG News Service is a Network World affiliate.