San Diego-based liquidation firm Heritage Global Partners has announced plans to auction failed US rural wireless provider Open Range’s assets on 11-12 January.
The assets up for sale, which includes equipment attached to 375 communication towers, had…
San Diego-based liquidation firm Heritage Global Partners has announced plans to auction failed US rural wireless provider Open Range’s assets on 11-12 January.
The assets up for sale, which includes equipment attached to 375 communication towers, had an original acquisition cost of more that US$100m, according to the auction firm. Open Range’s bankruptcy filings valued all its assets at US$114m.
Its collapse into Chapter 11 Bankruptcy, and subsequent liquidation, is being closely followed by the media because its total liabilities of US$110m includes a US$73.5m unpaid loan to the US federal government.
Some politicians have questioned whether this five-year loan, which was issued to the company in 2008 by the Department of Agriculture’s Rural Utilities Service (RUS), was awarded in the public interest. An investigation has been launched by the US Energy and Commerce Committee to determine whether taxpayers’ funds were used appropriately.
Open Range filed for bankruptcy protection on 6 October 2011, following a series of regulatory and operational difficulties. According to the company, its cash-flow issues included delays in getting funds from the RUS credit line, a higher-than-expected rate of customer non-repayment, and its network equipment not having the geographical coverage that had been anticipated.
In addition, it was forced to search for an alternative spectrum source in 2009, when regulator FCC ruled against its satellite operator partner Globalstar’s request for an ATC licence extension. This decision prompted Open Range to partner with satellite/terrestrial venture LightSquared, whose frequencies are currently the subject of critical tests to determine whether they interfere with GPS spectrum.
Open Range set a course for liquidation late last year after its only potential acquirer, local broadband provider TotheHome, withdrew a US$2m offer to acquire all its assets.
