Bankruptcy filing reveals WCI's debt load

Aliza Earnshaw

WCI Group, a group of companies building fiber-optic networks and associated services headquartered in Hillsboro, Ore., has filed for Chapter 11 bankruptcy protection.

WCI includes WCI Cable Inc., Worldnet Communications Inc., Alaska Fiber Star LLC, Alaska North Star Communications Inc., WCIC Hillsboro LLC and WCI Lightpoint Inc. The group's total debt is more than $403 million, and its total assets are just under $342 million, according to voluntary petitions filed on behalf of each company with the U.S. Bankruptcy Court. The group is owned principally by AMP Life Ltd., an Australian financial services corporation.

WCIC has been building a submarine and land-based fiber-optic network linking Alaska with the West Coast, and has large network operations centers in Hillsboro and Alaska. Affiliate Alaska Fiber Star has been building a fiber optic network in Alaska, which is connected to the WCIG network. WCI Lightpoint has been providing colocation services on the WCIC network.

Marcus Derwin, president and CFO of WCI, confirmed that the group has filed for Chapter 11 bankruptcy, but would not comment on whether the group would resume operations after a reorganization under Chapter 11.

North Sky Communications of Vancouver, Wash., had contracted to build more than 60 miles of WCI's cable network from the Oregon coast to Hillsboro and on to downtown Portland. Bill Tierney, president of North Sky, said that WCIG recently made a large payment to North Sky, and has not missed any payments to date. "Until we were notified last Wednesday to shut the project down, we had no indication that this [the bankruptcy] was coming," he said.

New Edge Networks, a provider of DSL services located in Vancouver, Wash., colocates one of its regional hubs at WCI's local facility. "Our managers and engineering team have been in communication with [WCI]," said Sal Cinquegrani, a New Edge spokesperson. "For us, it's business as usual."

WCIG had been providing broadband capacity for ReFlex Communications, based in Seattle, which filed for a Chapter 7 liquidation earlier this year. ReFlex had been providing broadband services for more than 250 multi-unit residential developments in cities across the country. WCI recently entered into a contact with TyCom Ltd. (NYSE: TCM), a subsidiary of Tyco International, to build part of TyCom's undersea fiber optic cable network, to which WCIG's network would also be linked.

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