NorthPoint Files for Bankruptcy

SAN FRANCISCO -- NorthPoint Communications, Inc. (NASDAQ:NPNT) announced today that it has filed a petition for Chapter 11 protection with the U.S. Bankruptcy Court for the Northern District of California in San Francisco. The company also announced it has secured a commitment for up to $38 million of debtor in possession (DIP) financing from its existing lenders to continue day-to-day operations. $25 million of this financing commitment is available immediately and the remaining $13 million will be made available upon the satisfaction of certain conditions. The company also announced its intention to proceed with a structured sale of substantially all of its business and assets. The company plans to seek approval today of open bid procedures from the U.S. Bankruptcy Court.

"When Verizon unexpectedly pulled out of the merger and its interim funding obligations, which we believe was a breach of Verizon's agreements with NorthPoint, it created a funding shortfall," said NorthPoint Communications President and CEO Liz Fetter. "Chapter 11 protection will provide NorthPoint with protection from creditors while enhancing our ability to meet our obligations to customers and vendors by reducing or restructuring our immediate financial obligations. NorthPoint plans to use this "breathing room" to look for a financially sound strategic partner who is interested in our network, our skilled and dedicated employees and our attractive customer base."

http://www.northpointcom.com