Friday, April 13, 2012

Wave2Wave in BK

I just learned that Wave2Wave filed for Chapter 11 bankruptcy in February. Wave2Wave bought RNK in 2007. " Less than a year after Wave2Wave acquired the company, Verizon Services Corp. filed a suit against RNK over reciprocal compensation charges and access charges in N.Y., Mass. and R.I. As that dispute continued, Verizon placed a majority of the monthly payments it owed RNK in escrow toward an “alleged balance” of more than $4 million." It always seems that VZ is involved with many BK filings in telecom.

"Verizon threatened to turn off service this morning," said Michael Sirota, a Hackensack attorney who represents Wave2Wave. "So the bankruptcy was filed to stop them from terminating services and allowing us to quickly restructure with Verizon and other creditors," according to NJ news reports.

"The documents say Wave2Wave lost $17 million in 2011 on revenue of $57 million, and was hurt by rulings from the Federal Communications Commission and New Jersey's Board of Public Utilities that reduced the amount the company could charge customers – shrinking its revenue...The Wave2Wave bankruptcy filing says its revenue suffered when the BPU ordered local carriers, such as RNK, to reduce the amount they charge long-distance carriers that use their local services....The company reported current and long-term debt of $36 million." [source] Apparently, a lot of money from inter-carrier compensation and no foresight that ICC would be diminishing. Oops! It reminds me of CLEC's that didn't think UNE-P would be taken away. Where's the Plan B? Although what Plan B can you have with losses and debt.

According to the creditors list, VZ is owed less than $3M. But VZ will liquidate your ass for as little as $1 mill.

Interesting, they owed Alteva $64K.

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