Riverstone's Bankruptcy Begins
Filed on Feb. 7 in Delaware, the petition is part of a plan, announced that same day, for Lucent Technologies Inc. (NYSE: LU) to acquire the company. Once Riverstone has settled with its creditors, the company's assets will be auctioned off, with Lucent already putting in a $170 million bid. (See Riverstone Posts Info and Lucent Gets Riverstoned.)
Most analysts consider the price high -- Riverstone's market capitalization is around $138 million -- so it doesn't appear likely that Lucent's bid will be thwarted. After the asset sale, Riverstone plans to distribute cash to shareholders.
All this could take a while -- Riverstone's Website notes that the hearing on the asset sale is set for March 23. Riverstone's plan of liquidation would be filed in April.
Stuck on a treadmill of earnings restatements, Riverstone hasn't filed an up-to-date quarterly report in more than two years. (See Riverstone Misses SEC Deadlines.) The Chapter 11 filing offers a glimpse of the books, though. It lists Riverstone's assets at $98,341,134 -- not including long-term investments, property, and goodwill -- and its liabilities at $130,071,947.
Nearly all of Lucent's debt is owed to U.S. Bank, which holds $65.9 million in notes that Riverstone issued in 2001; those notes were coming due late this year. (See Riverstone Offers Notes.)
Ixia (Nasdaq: XXIA) is owed roughly $136,000 and HP Inc. (NYSE: HPQ) roughly $53,000, according to the bankruptcy filing.
Things ramp down steeply from there, as no other creditor is owed more than $20,000. In fact, the 20th largest creditor, according to the filing, is Le Boulanger, claiming an unpaid bill of $152.23. Unpaid sandwiches aren't exactly scandal material. (See Strip-Club Scandal CEO Quits.)
The creditor list has no big surprises, but there's one amusing entry: Light Reading makes the list, with a claim of $3,200.
The recent Light Reading poll on the acquisition shows 61 percent of readers (441 respondents) saying Lucent is doing the right thing. And 38 percent say they're sad to see Riverstone go.
As for the real winner in all this, 36 percent said Lucent, and another 28 percent voted for Riverstone's shareholders. But 21 percent think the winner is "someone else." To those who voted that way: Feel free to use this story's message board to enlighten us.
— Craig Matsumoto, Senior Editor, Light Reading