US rural wireless provider Open Range is set for liquidation after its sole bidder withdrew a US$2m offer to acquire its assets out of Chapter 11 bankruptcy protection.
Local broadband provider TotheHome emerged as the group’s “stalking horse”…
US rural wireless provider Open Range is set for liquidation after its sole bidder withdrew a US$2m offer to acquire its assets out of Chapter 11 bankruptcy protection.
Local broadband provider TotheHome emerged as the group’s “stalking horse” bidder on 27 October, and filed an asset purchase agreement to the US bankruptcy court of Wilmington, Delaware, on 2 November.
However, a court filing on 15 November reveals: “The Buyer has advised the Debtor that they will not be proceeding with the purchase of substantially all of the Debtor’s assets in accordance with the Asset Purchase Agreement, dated November 2, 2011.”
Open Range filed for bankruptcy protection on 6 October after failing to get its satellite broadband business off the ground, following a series of regulatory and operational difficulties.
CFO Chris Edwards said at the time that, if no buyers were found for either the entire business or select assets over the next month, then it will immediately shut down its network and wind down business operations through liquidation.
Open Range and TotheHome could not be contacted before the press deadline.
According to Open Range, it has US$114m in assets and total liabilities of US$110m. It posted an operating loss of US$50.4m last year on sales of US$1.7m.
In March, Open Range and the satellite/terrestrial venture LightSquared announced that they had come to a “multi-year strategic network partnership”.
This was expected to include a licensing agreement, allowing Open Range to lease LightSquared’s L-band spectrum, and a wholesale agreement, allowing the rural wireless provider to sell LightSquared’s satellite capacity to its customers.
Yet since this agreement was announced, the ambitions of both companies have been frustrated. While Open Range is now facing liquidation, LightSquared’s technology has been beset by GPS interference problems and it has still not been allowed to start providing services on its network by the FCC.
