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Financial

Allegiance Files for Chapter 11

Allegiance Telecom Inc. (Nasdaq: ALGX) has filed for Chapter 11 bankruptcy protection from creditors, according to wire reports Wednesday.

The filing comes a day after approximately 1,000 Allegiance customers’ Websites (ours included) were taken down for an entire business day. A construction accident in Boston cut through four OC48 links on Allegiance’s network (see Big Dig KOs Light Reading).

Allegiance listed $1.44 billion of assets and $1.4 billion of debts in its filing with the U.S. Bankruptcy Court for the Southern District of New York. More than three dozen affiliates also sought court protection, according to the filing.

Allegiance shares closed Wednesday on the Nasdaq at $0.29, down 6.4 cents, or 18.1 percent. After-hours trading of the stock was halted.

The company did not return calls for comment by press time.

— Jo Maitland, Senior Editor, Boardwatch

optical_man 12/5/2012 | 12:04:01 AM
re: Allegiance Files for Chapter 11 All who didn't see this collapse coming like a Texas Twister, please raise your right hand and take two steps off the side of the planet...
BobbyMax 12/5/2012 | 12:03:53 AM
re: Allegiance Files for Chapter 11 Allegiance did not have any valid business model for its business and deceived its financiers. It never conducted any case study.

It started to provide services without regard to profitability. It started to buy expensive equipment to build its own network providing voice, data, and internet services.
Dr.Q 12/5/2012 | 12:03:47 AM
re: Allegiance Files for Chapter 11 Lightreading-

What's your backup plan if Allegiance shuts down for good?

-Dr.Q
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