Open Range Communications Inc. of Greenwood Village, Colo. Files For Chapter 11 Bankruptcy Protection

Early Thursday morning, Open Range Communications Inc. voluntarily filed for chapter 11 bankruptcy protection in Wilmington, Delaware.  The company, which is headquartered in Greenwood Village, Colorado, was formed in 2004 "with a mission to provide broadband access to unserved and underserved rural Americans."  The company's operations were primarily funded through loans from the Rural Utilities Services of the United States Department of Agriculture and equity commitments from One Equity Partners III, L.P.  In January 2009, Open Range Communications received the largest broadband loan ever awarded by the Rural Utilities Services and the commitment from One Equity Partners represented the largest private equity investment supporting such a loan, according to bankruptcy court filings.

Open Range launched in its first market nine months after closing on the Rural Utilities Services loan and had reached 36 markets and 220,000 subscribing households by June 30, 2010.  The company had its "momentum . . . substantially adversely affected" by problems that the provider of its ATC spectrum, GlobalStar Licensee LLC, had retaining the spectrum that Open Range was using to deliver its services.  According to court filings, Open Range attempted to find spectrum alternatives and had discussions with two alternative providers, LightSquared and Clearwire, but the challenges led to problems with its vendors and the flow of funding for its operations.  Nevertheless, Open Range still has operations in twelve states and 26,000 subscribers.

Read more details on the bankruptcy filing and the company's plans for the bankruptcy after the jump.



Open Range reports that it had $114 million in assets and $110 million in liabilities as of September 30, 2011.  For the last fiscal year (ended 12/31/2010), Open Range generated an operating loss of over $50 million on revenues of less than $2 million.  Following "recent significant workforce reductions," Open Range has 48 employees.

In a declaration filed with the bankruptcy court, Open Range's Chief Financial Officer stated that Open Range filed for chapter 11 bankruptcy protection to utilize the automatic stay to "effectuate either (i) a section 363 sale of substantially all of its assets as a going concern or sales for select assets or (ii) a wind-down of its business operations through a liquidation in chapter 11."  The company plans to market its assets during the first 30 days of the bankruptcy cases to see whether there are any parties that have interest in acquiring the assets.  If no bidders are identified, Open Range will "immediately shut down its network and begin a wind-down of its operations" which it expects will take approximately three months.

To access copies of bankruptcy court filings in this case, please visit our website:  http://www.chapter11cases.com/Open-Range-Communications-Inc_c_29276.html

Among the major bankruptcy court filings thus far:

• Chapter 11 Voluntary Petition, List of Largest Unsecured Creditors
• Declaration of Chris Edwards, Chief Financial Officer of Open Range Communications Inc., In Support of the Debtors Chapter 11 Petition and First Day Motions
• Motion of the Debtor for an Order Authorizing the Debtor to Honor Customer Guarantee Program and Otherwise Continue Prepetition Customer Programs and Practices in the Ordinary Course of Business
• Motion of Debtor for an Order (I) Authorizing: (A) Payment of Prepetition Employee Wages, Salaries, Commissions and Other Compensation; (B) Payment of Prepetition Compensation Owed to Independent Contractors; (C) Reimbursement of Prepetition Employee Business Expenses; (D) Payments for Which Prepetition Payroll and Tax Deductions Were Made; (E) Contributions to Prepetition Employee Benefit Programs and Continuation of Such Programs in the Ordinary Course; (F) Continuation of Workers Compensation Policies; and (G) Payment to Third Parties of All Costs and Expenses Incident to the Foregoing Payments and Contributions; and (II) Authorizing and Directing Applicable Banks and Other Financial Institutions to Honor and Pay All Checks and Transfers Drawn on the Debtor's Operating Account to Make the Foregoing Payments
• Motion of the Debtor for an Order Authorizing Payments to Certain Critical Vendors on Account of Their Prepetition Claims
• Motion of the Debtor for an Order (I) Rejecting Certain Unexpired Leases of Nonresidential Real Property and (II) Rejecting Certain Executory Contracts, Pursuant to 11 U.S.C. Section 365 (Attachments: # 1 Exhibit A - Proposed Order# 2 Exhibit A to Order - Leases# 3 Exhibit B to Order - Tower Space Agreements# 4 Exhibit C to Order - Circuit Contracts)

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