NEW YORK -- WINSTAR COMMUNICATIONS INC. (NASDAQ: WCII) today announced that it has filed a lawsuit against Lucent Technologies in the U.S. Bankruptcy Court for the District of Delaware. The lawsuit seeks $10 billion in damages for Lucent’s breach of its obligations under its strategic partnership agreement with Winstar. In addition, Winstar is seeking immediate injunctive relief requiring Lucent to specifically perform its contractual obligations, including the payment of more than $90 million, which Lucent failed to pay to Winstar on March 30, 2001, in breach of its agreement.

Winstar’s legal filing today alleges that “Lucent represented that it had the expertise, personnel and financial wherewithal to undertake its obligations under the Supply Agreement … Little more than two years into the five-year agreement, Lucent has shown its promises were hollow.”

The complaint and supporting materials further allege that Lucent has been under close scrutiny by analysts regarding its vendor financing. Lucent has publicly confirmed that in order to conserve cash, Lucent is actively managing its vendor-financing portfolio. As Lucent has publicly stated: “We actively manage our vendor-financing portfolio to minimize the impact on Lucent’s cash requirements.” Lucent breached its agreement with Winstar and injured Winstar’s ability to complete its broadband network. Lucent’s breach of its contract with Winstar has forced the Company to seek protection under the U.S. Bankruptcy Code.

Winstar emphasized that this lawsuit was filed to recover the damages to its business for its shareholders and bondholders. The Company stressed that its ability to emerge from the Chapter 11 process as a successful operating entity is not contingent on the receipt of any damage award in this lawsuit.

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