Logo

RCN Files Reorganization Plan

Aug 24, 2004  •  Post A Comment

RCN Corp., the bundled cable, telephone and high-speed data company that filed for bankruptcy protection in May, late Monday unveiled a restructuring plan that would reduce the company’s debt load by $1.2 billion.

The plan, which faces approval from both a U.S. bankruptcy court judge as well as the Princeton, N.J., company’s creditors, involves swapping debt for equity. In addition, several nonoperating RNC subsidiaries have voluntarily filed for Chapter 11 bankruptcy protection to facilitate the debt-for-equity swap.

The company expects to emerge from bankruptcy in the fourth quarter.

RCN filed for bankruptcy protection in May after buckling under a crushing debt load sparked by the construction of a fiber network in urban areas such as New York, Los Angeles and Boston and the company’s inability to generate sufficient subscriber growth to offset the capital expense.