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Williams Ponders Bankruptcy

Light Reading
News Analysis
Light Reading
2/25/2002
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Williams Communications Group (NYSE: WCG) stock lost nearly 60 percent on Monday, after the company announced that it is considering Chapter 11 bankruptcy in order to clean up its balance sheet (see Williams Considers Chapter 11).

The company’s stock closed down $0.20 (56.86%) to $0.22.

This news comes less than two weeks after the company reassured investors that it would not default on any loans or file for bankruptcy (see Williams: Blowing Wind? ). On a conference call with investors and analysts on February 13th, Scott Schubert, executive vice president and CFO, said that the company would restructure its balance sheet without “needing to seek bankruptcy court protection.”

But it looks as though the company has rethought its strategy. In a press release issued this morning, the company stated that it is in talks with its banks and other lenders to come up with a suitable solution, which could include bankruptcy. According to the press release, the company expanded its options for reorganizing its balance sheet on February 22nd, after it realized that some lenders, other than banks, would not likely participate in the restructuring.

As of last Friday the company’s debt was already rated in the C category, well below what most in the industry would consider investment-grade debt.

Like other next-generation telecom carriers that built out massive nationwide and international networks, Williams is saddled with tremendous debt. Currently, the company owes its lenders approximately $5.16 billion, with interest payments ballooning to nearly $500 million annually.

If Williams files for bankruptcy it will be following in the footsteps of other carriers like Global Crossing Ltd. (NYSE: GX), which filed in January, and 360networks Inc. (Toronto: TSX), which filed in June of 2001 (see Global Crossing Falls Overboard and 360networks Calls It Quits). Other carriers are struggling with cash-flow and liquidity issues. Qwest Communications International Inc. (NYSE: Q) recently was forced to draw on a $4 billion of credit and Level 3 Communications Inc. (Nasdaq: LVLT), which is currently trading at around $3 a share, also has investors nervous.

Williams plans to cut its total costs by 25 percent, which will likely translate into layoffs of the same magnitude.

— Marguerite Reardon, Senior Editor, Light Reading
http://www.lightreading.com

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Reality Bytes
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Reality Bytes,
User Rank: Light Beer
12/4/2012 | 10:53:18 PM
re: Williams Ponders Bankruptcy
If I were a shareholder or creditor of Williams I would be having an even closer look now at the dealings of Matt Bross. It is now very evident that many deployments were not in the interest of the company, rather they were in the interest of Matt Bross' pockets. Just how much has he made from the shares of system vendors that Williams have deployed?

"Like other next-generation telecom carriers that built out massive nationwide and international networks, Williams is saddled with tremendous debt. Currently, the company owes its lenders approximately $5.16 billion, with interest payments ballooning to nearly $500 million annually."
docsisdude
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docsisdude,
User Rank: Light Beer
12/4/2012 | 10:53:17 PM
re: Williams Ponders Bankruptcy
or should i say, who are those owed significant money from williams?
G Man
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G Man,
User Rank: Light Beer
12/4/2012 | 10:53:16 PM
re: Williams Ponders Bankruptcy
Agreed.

I've read about WCG's stock pumping scams, how "testers" were given stock grants in start-ups that Bross had an interest in, how these optical start-ups IPOed to incredible heights after WCG announced they were deploying the start-up's equipment in the WCG network. How much of what was deployed was good, old fashioned CRAP, and how Matt Bross and the other WCG execs walked away with $$MILLIONS$$ in personal wealth.

All, it seems, without the SEC batting an eye lash.

Just amazing.

I know ERON and Global Crossing have the public attention now. But when the books get opened to the public, MAN, there is going to be hell to pay!!!
G Man
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G Man,
User Rank: Light Beer
12/4/2012 | 10:53:15 PM
re: Williams Ponders Bankruptcy
Major customer is SBC, followed by (in no particular order) KDDI, Verizon, and Boeing.

Lots of vendors (Lucent, Ciena, Sycamore, Corvis, ONI, Cisco). Just about every one will be lining up, hat in hand, when the CRAP Matt Bross and Howard Jazen have cooked up hits the fan.

G Man
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G Man,
User Rank: Light Beer
12/4/2012 | 10:53:14 PM
re: Williams Ponders Bankruptcy
They even gave the stock pumping operation a fancy name. Check out the WCG webpage, though the funky video of Matt Bross explaining stock pumpin with a plastic tinker-toy is gone. Check out "Tech Farm".

What a hoot!
G Man
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G Man,
User Rank: Light Beer
12/4/2012 | 10:53:14 PM
re: Williams Ponders Bankruptcy
O-Man,

The Public is ALREADY aware, at least, there is plenty of information on this in the public domain already.

In fact, this here electronic rag (LR)has done a GREAT job in exposing the shenanigans of Mr. Bross and his co-conspirators. And, I am EXTREMELY pleased that someone had the large electronic testicles to tell the story in the open.

But, where is the SEC in all of this? I assume that those fellas and felines can read as well as you and me.

what a DISGRACE to public service they are.
optical_man
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optical_man,
User Rank: Light Beer
12/4/2012 | 10:53:14 PM
re: Williams Ponders Bankruptcy
Author: G Man Number: 3
Subject: Re: Matt Bross Date: 2/25/2002 7:12:57 PM


Agreed.

I've read about WCG's stock pumping scams, how "testers" were given stock grants in start-ups that Bross had an interest in, how these optical start-ups IPOed to incredible heights after WCG announced they were deploying the start-up's equipment in the WCG network. How much of what was deployed was good, old fashioned CRAP, and how Matt Bross and the other WCG execs walked away with $$MILLIONS$$ in personal wealth.


Yup. I personally know of one startup who gave him THOUSANDS of shares. And I'm just one person in one little company in one area of technology that Matt Bross was investigating.
Question, will this make the light of day in bankruptcy court?
G Man
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G Man,
User Rank: Light Beer
12/4/2012 | 10:53:13 PM
re: Williams Ponders Bankruptcy
The link to Light Readings earlier story on Matt Bross and his profiting by taking stock grants from vendors suppling Williams:

http://www.lightreading.com/do...

Great bed time reading...

(and thanx again to L.R.!!) You guys and gals are Great!!
G Man
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G Man,
User Rank: Light Beer
12/4/2012 | 10:53:13 PM
re: Williams Ponders Bankruptcy
Hey Light Reading,

could you provide links to your earlier work on Matt Bross?

This story is too good to be fiction.

Incredible.
G Man
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G Man,
User Rank: Light Beer
12/4/2012 | 10:53:12 PM
re: Williams Ponders Bankruptcy
This is one quote from the earlier L.R. article that has got to be framed,...

"Networking companies that already have gone public say that the practice of issuing options and directed shares is having an impact on their business. "I'd guess that pre-IPO stock grants figure in well over half the deals we lose to startups these days," says a senior executive at a major networking company, who spoke on condition of anonymity. "I suspect that one day there will be investigations into this by the SEC, DoJ, Congress, and so on, but right now everybody's making too much money for much outrage to fuel such investigations," the executive adds."

Well, the optical stock scams have run their course. I guess it's time for the SEC, DoJ and Congress to get to work on checking this mess out.
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