RE: Covad, Chapter 11 !

From: []
Sent: Wednesday, August 08, 2001 7:57 AM

> > Just found this...
> >
> >
> i read a similar article y'day, and that was the first that i had
> heard mention of rhythms going down. either i was too busy
pulling my
> hair out last month or they were really good about keeping it quiet.
> *sigh*
> looks like verizon is gonna be the only xdsl provider left solvent
> when the dust settles. how scary is that, and how predictable?

Although this may well ultimately prove true, people do realize that
filing for chapter 11 is not synonymous with going out of business,

Show me one case, in the xDSL CLEC business where this has held true. Thus
far, *every* one of them, that has filed CH11, has gone out of business
within 30 days, as near as I can tell. The track record is pretty dismal.

I think the one exception to the rule in Covad's case is that Covad seems
to have their reorg plan already in place and with the blessing of the
majority, if not all, of their bondholders. I have no experience with
bankruptcy law, but given the fact that the debt-retiring deal has been
made, where is the need to file Chapter 11? To flush out the bondholders
who haven't agreed to the stock-for-debt deal?