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WAN Services /
Covad formally files for bankcruptcy protection
 
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As expected, Covad Communications Group, the parent company of national DSL provider Covad, formally filed for Chapter 11 bankruptcy this week.
Covad officials say the move should have no impact on customers or on Covad's continuing operations. The company announced plans to file for bankruptcy protection on August 7 (See: Covad files Chapter 11 to 'reorganize' business).
Covad has a prenegotiated plan in place with a majority of its bondholders to eliminate the company's debt of $1.4 billion. In return for their bonds, bondholders will receive 19 cents on each bond dollar and preferred stock in Covad.
The goal of the filing is to bind all of the company's bondholders to the debt elimination plan.
Covad expects to emerge from the Chapter 11 process by January 2002 at the latest with a healthier balance sheet.
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