Open Range Communications will see its assets liquidated and its WiMAX service shut down in 12 states after the only bankruptcy bidder backed out of the deal on Tuesday.
TotheHome.com, a small Minnesota ISP, was the "stalking horse" bidder for Open Range's assets with a $2-million bid, but the company has notified Open Range that it would not be purchasing the company's assets after all under a Nov. 2 purchase agreement.
TotheHome President Shawn Sprengler said during a hearing in U.S. Bankruptcy Court in Wilmington, Del., that the company received "some information Friday that was not what we expected." He didn't elaborate on what the information was.
Chris Ward, counsel for Open Range's unsecured-creditors committee had some harsh words for ToTheHome.com. "We find this to be very irresponsible, and probably actionable, on their part," Ward told The Denver Post. "Unfortunately, Open Range will be shutting off its service and liquidating its assets by the end of the year. This is a very tragic end to what seems like a doomed company."
Last week, the House Energy and Commerce committee launched an investigation into the Department of Agriculture's $267 million loan to Open Range. Six bipartisan members of the committee sent a letter to Rural Utilities Service Administrator Jonathan Adelstein, a former FCC commissioner. The outstanding balance of the loan, which was the largest in a series of loans made to rural broadband providers between 2002 and 2008, remains $73.5 million.
When Open Range filed for bankruptcy Oct. 5, the company listed total assets of $114 million and total liabilities of $110 million as of Sept. 30. The company's top five creditors are Adesta ($7.574 million), Velocitel ($5.590 million), One Equity Partners (Chase) ($2.789 million), Alvarion ($1.960 million), and Black Dot Wireless ($742,316).
Privately held Open Range operates a WiMAX network in more than 140 markets spanning more than a dozen states. Earlier this year, the company said it counted more than 20,000 subscribers. The company essentially jettisoned all positions in its markets outside of its headquarters in Greenwood Village, Colo. The company also said it would stop accepting new customers, though it would continue providing service to existing customers.
For more:
- see this Denver Post article
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