ICG files for Chapter 11 bankruptcy Debt, operational difficulties sink communications company REUTERS NEW YORK, Nov. 14 B ICG Communications Inc., a telecommunications upstart that had been a darling of industry barons, on Tuesday filed for Chapter 11 bankruptcy, facing a mountain of debt and operational difficulties.

THE CASH-STRAPPED COMPANY, which sells telephone and Internet connections to businesses and homes, has faced complaints about service, plummeting profits, management turmoil and lawsuits from irate investors in recent months. An analyst said Englewood, Colo.-based ICG also was caught in a harsh change of market sentiment as Wall Street turned its back on companies who failed to deliver on promises of rapid growth. BItBs not a pretty situation over there,B said the analyst, who asked to remain anonymous. BI think Chapter 11 is their only option.B Randall Curran, who took over as ICGBs chief executive in late September, said in a statement that the company had enough money to carry out its current restructuring. BWe believe weBll be able to reposition ICG to be a profitable and competitive company well into the future,B he said. In September ICG warned that its profits and revenues would be significantly lower than expected because of such problems as network outages and other technical failures. Advertisement

ICG filed a bankruptcy petition with the U.S. Bankruptcy Court in Delaware. Bankruptcy under Chapter 11 of the U.S. Bankruptcy Code frees a company from the threat of creditorsB lawsuits while it reorganizes its finances. ICGBs shares were halted on the Nasdaq market ahead of the announcement. The last price was 5/16, about 99 percent off the stockBs record high of $39-1/4 in March. ICGBs $2.4 billion in high-yield, or Bjunk,B bonds were trading between 11 and 14 cents on the dollar, bond traders said. The company said it had secured $350 million in new financing from Chase Manhattan Bank and that $200 million is available immediately. The remaining $150 million will be available when a number of conditions are met. ICG has about $160 million in cash on hand. Affiliates of Liberty Media Group, AT&T Corp.Bs cable programming arm headed by media billionaire John Malone, bought a $500 million stake in ICG early this year. Hicks, Muse, Tate & Furst, a private investment firm, also invested $230 million. Hicks, Muse and Liberty forced out Chairman and Chief Executive Shelby Bryan in August after the company first warned of its poor outlook for 2000 and 2001 earnings before interest, taxes, depreciation and amortization. BryanBs replacement, Liberty Media executive Carl Vogel, resigned after only four weeks in the job. A board member from Liberty Media and another from Hicks, Muse also quit.

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-- Carl Jenkins (somewherepress@aol.com), November 15, 2000