Exhibit 99.1
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FOR IMMEDIATE RELEASE APRIL 2, 2001
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Patti Kelly
Media Relations
(703) 390-2868
pkelly@pathnet.net
PATHNET FILES PETITION FOR
CHAPTER 11 BANKRUPTCY PROTECTION
RESTON, VA (APRIL 2, 2001) -- Pathnet Telecommunications, Inc. and its
subsidiaries today filed voluntary petitions pursuant to Chapter 11 of the
federal bankruptcy law. The filings were made with the U.S. Bankruptcy Court for
the District of Delaware. Pathnet is a wholesale, convergent telecommunications
provider, combining competitive local access service and long haul transport in
second and third tier markets.
Pathnet will continue to provide service to its customers while it evaluates its
strategic options and pursues discussions with potential purchasers of all or
part of its ongoing business. Pathnet is actively engaged in such discussions
with a national telecommunications company.
"The protection provided by Chapter 11 will conserve our cash and ensure that
all creditors are treated fairly and equally. Our ability to meet our
obligations to customers and vendors is thereby enhanced," said Richard Jalkut,
Pathnet's president and chief executive officer.
"Our management team will continue to lead the business and we will serve all of
our customers without interruption," Jalkut added. "Our immediate goal is to
continue providing outstanding service to our customers while we further develop
a current strategic opportunity."
Pathnet Telecommunications, Inc.'s wholly owned subsidiary, Pathnet, Inc.,
anticipates that it will be unable to make the April 16, 2001, semi-annual
interest payment on its 12 1/4 percent Senior Notes. It is entering into
discussions with the holders of the notes.
"Filing for Chapter 11 will also provide us with the `breathing room' to discuss
our situation with the holders of our Senior Notes," said Jim Craig, Pathnet's
chief financial officer.
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CHAPTER 11 ANNOUNCEMENT - 2
Pathnet also announced that it has retained the financial restructuring firm of
Policano & Manzo as its financial advisers and the firm of Houlihan, Lokey,
Howard and Zukin as its investment bankers.
Pathnet is a wholesale telecommunications service provider that delivers
broadband access and transport solutions to underserved markets nationwide over
a wholly convergent network. Pathnet provides service to classic
telecommunications carriers, as well as to emerging carriers such as Internet
service providers and competitive local exchange carriers, giving them the
ability to improve their profitability in today's environment via capital-free,
low-risk market expansion. Pathnet currently has 7,700 route miles of completed
network and 3,400 additional route miles of network under construction or swap
commitment. Additional information about Pathnet can be found on the company's
web site at: WWW.PATHNET.NET.
THE STATEMENTS MADE BY PATHNET IN THIS PRESS RELEASE MAY BE FORWARD-LOOKING IN
NATURE. NO ASSURANCE CAN BE GIVEN THAT FUTURE RESULTS WILL BE ACHIEVED; ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN FORWARD-LOOKING
STATEMENTS. PATHNET BELIEVES THAT ITS PRIMARY RISK FACTORS INCLUDE, BUT ARE NOT
LIMITED TO: SIGNING ADDITIONAL AGREEMENTS WITH PRIVATE NETWORK OPERATORS AND
OTHERS; OFFERING SERVICES TO TELECOMMUNICATION SERVICE PROVIDERS; ENTERING INTO
PARTNERING ARRANGEMENTS; BUILDING A DIGITAL NETWORK; MEETING MARKET DEMAND AND
CUSTOMER SERVICE EXPECTATIONS; AND OBTAINING ADDITIONAL FINANCING. ADDITIONAL
INFORMATION CONCERNING THESE AND OTHER POTENTIALLY IMPORTANT FACTORS CAN BE
FOUND WITHIN PATHNET'S REGISTRATION STATEMENT AND PERIODIC REPORTS FILED WITH
THE U.S. SECURITIES AND EXCHANGE COMMISSION UNDER THE FEDERAL SECURITIES LAWS.
STATEMENTS IN THIS RELEASE SHOULD BE EVALUATED IN LIGHT OF THESE IMPORTANT
FACTORS.