McLeod CEO, CFO Resign

Chris Davis resigns as CEO and Ken Burckhardt resigns as CFO; McLeod appoints Stan Springel of Alvarez & Marsal as chief restructuring officer

August 17, 2005

2 Min Read

CEDAR RAPIDS, Iowa -- McLeodUSA Incorporated, one of the nation’s largestindependent, competitive telecommunications services providers, today announced that, in connectionwith its anticipated capital restructuring and change of ownership, Chris Davis, Chairman of the Board ofDirectors and Chief Executive Officer of the Company resigned as Chief Executive Officer effectiveAugust 12, 2005. Ms. Davis will remain as Chairman of the Board of Directors. Also effective on August12, Ken Burckhardt resigned from his positions as Executive Vice President and Chief Financial Officer,and a Director of the Company.

The Company has appointed Stan Springel of Alvarez & Marsal as Chief Restructuring Officer. Alvarez& Marsal is a well-known firm that provides management and consulting services for companies goingthrough a restructuring process. Joe Ceryanec, Group Vice President - Controller and Treasurer of theCompany has been appointed as the acting Chief Financial Officer.As previously announced, the Company is working with its lenders to effectuate a capital restructuringwhere the lenders would convert a substantial portion of their debt to equity and become the Company’sstockholders. None of the restructuring alternatives under evaluation provide for any recovery for theCompany’s current preferred or common stockholders. Therefore, the Company does not expect holdersof its preferred or common stock to receive any recovery in a capital restructuring. In addition, there canbe no assurance that the Company will be able to reach an agreement with its lenders regarding a capitalrestructuring on terms and conditions acceptable to the Company prior to the end of the forbearance periodon September 9, 2005. Under the forbearance agreement, the lenders have agreed not to take any action asa result of non-payment by the Company of certain scheduled principal amortization and interest paymentsthat are due on or before September 9, 2005.

The Company continues to believe that by not making principal and interest payments on the creditfacilities, cash on hand together with cash flows from operations are sufficient to maintain operations inthe ordinary course without disruption of services or negative impact on its customers or suppliers.McLeodUSA remains committed to continuing to provide the highest level of service to its customersand to maintaining its strong supplier relationships.

McLeodUSA Inc.

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like