Acterna Emerges From Chapter 11

Coming out of Chapter 11, Acterna names new board, consisting of Todd Arden, Alain Couder, James Gaffney, Edward Horowitz, and John Peeler

October 17, 2003

4 Min Read

GERMANTOWN, Md. -- Only five months after initiating its case, Acterna today emerged from chapter 11 protection ready to build on its global communications test leadership with a stronger balance sheet. As previously announced, Acterna’s Plan of Reorganization received overwhelming support from all classes of creditors and was confirmed by the U.S. Bankruptcy Court for the Southern District of New York on September 25. Acterna subsidiary, da Vinci, the leading manufacturer of color image enhancement and automatic film and video restoration technology, has also emerged from chapter 11 protection.

“Acterna has continued to serve its customers and deliver new innovations throughout the debt restructuring process,” said John Peeler, president and chief executive officer. “We emerge today with a bright future and as a stronger company more committed than ever to the employees, customers, suppliers and other business partners that have been so instrumental to our continued success.”

Acterna’s strategic focus is to deliver communications test solutions that help its customers deploy new communications services, reduce operating expenses and improve quality. Its customers include leading communications service providers -- such as Alltel, AT&T, Bell South, BT, Comcast, Deutsche Telekom, France Telecom, Telefónica, SBC, Time Warner Cable and Verizon – as well as equipment manufacturers including Alcatel, Cisco, Lucent, Nortel and others. During the last five months, Acterna has introduced more than 10 new products and enhancements. The company will launch 12 more new products and major enhancements before the end of the year.

"Acterna’s sales and support team has truly exhibited the extra-mile effort to support our network engineering and operations staff," said Bill Wyatt of Alltel, a communications service provider with 12 million customers and nearly $8 billion in annual revenue. "As Alltel continues to evolve its network technologies and service offerings, we look to Acterna as a partner in our future success."

“Acterna has a long, proven track record as one of the leading providers of communications test solutions for optical, access and cable networks," said Dana Cooperson, group and program director for RHK, Inc., a global telecom research and advisory services firm. “The company’s health has improved through their recent reorganization, and they are aligning their business to meet the growing need among communications service providers to launch new services and lower network expenses through improvements in business processes.”

Acterna also announced a new, five -member Board of Directors, effective today. The new Board is made up of the following members:

Todd Arden, director, Angelo, Gordon & Co., an investment management firm with approximately $10 billion under management. Previously served as portfolio manager and senior analyst within AIG/SunAmerica's High Yield Group.

Alain Couder, president and CEO of Confluent Software. Former chief operating officer of Agilent Technologies and former chairman and CEO of Packard Bell NEC.

James Gaffney, director for several companies -- including Hexcel Inc., Imperial Sugar Company (chairman), SCP Pool Inc. – with strong turnaround expertise. Former CEO of General Aquatics/KDI Corporation, International Tropic-Cal, Ayers/Chairmakers, Inc., Brown Jordan Company and Washington Industries.

Edward Horowitz, founder and chairman of EdsLink LLC, a financial and technology consulting service, and former chairman of e-Citi, a Citigroup unit created to pioneer Citigroup’s e-commerce initiatives. Previously served as senior vice president, technology and operations, for Viacom Inc.

John Peeler, president and CEO, Acterna. More than 25 years of communications industry experience, including 23 years with Acterna, and a depth of expertise in engineering and operations.

“Acterna has assembled a world-class Board of Directors made up of strong leaders with a depth of business and technology expertise,” said Peeler. “Our management team looks forward to working with these incoming directors as Acterna builds momentum and embarks on a successful new era.”

Under the terms of Acterna’s Plan of Reorganization, which becomes effective today, Acterna’s senior secured debt holders receive 100 percent of the company’s equity through a debt-for-equity swap. Acterna emerges as a privately held company with long-term debt of approximately $190 million and quarterly cash interest expense of less than $2 million. Holders of Acterna’s current convertible and subordinated notes will receive warrants having diminimus value. Unsecured creditors receive a cash distribution of approximately 10 percent of their claims. Current equity holders will receive no distribution under the terms of the plan.

Acterna Corp.

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