Telesphere Files for Ch. 11 Bankruptcy Protection

Telesphere Files for Ch. 11 Bankruptcy Protection

Post by Charlie Min » Sat, 14 Sep 1991 18:39:13



I thought this article might update what is happening to Telesphere in
the bankruptcy courts.

A CHAPTER 11 FILING IS SET BY TELESPHERE

By Anthony Ramirez, {The New York Times}, September 12, 1991 at D4

        Telesphere Communications, Inc., which for weeks had resisted
a liquidation of the company sought by angry creditors, said yesterday
that it would seek protection from its creditors under Chapter 11 of
the Federal Bankruptcy Code and that it had hired a new chief
executive from a crisis-management company.

        The telecommunications company also said it would stop
providing "900-line" telephone services like "phone sex" and
horiscopes, which once producted most of its revenues, because such
services had "become increasingly unprofitible due to consumer
dissatisfaction and the resulting difficulty in collecting bills."

        In Chicago, Dennis M. O'Dea, a bankruptcy lawyer representing
a group of companies providing services to Telesphere, said the filing
was a positive development that ended "the confusion of Telesphere's
status."  But he said he was puzzled by Telesphere's termination of
its "900-line" business.  "We are rather mystified, because it must
have some value," he said.

        Telesphere, which is moving its headquarters from Oakbrook
Terrace, IL, to Rockville, MD, has posted large losses on nearly half
a billion dollars in revenues in the most recent 18 months.  In 1990,
the company lost more than $18 million, on $293 million in sales, and
in the first half of this year it lost a further $17 million on
revenues of $195 million.

        On Aug. 19, ten of Telesphere's programming suppliers filed a
petition to liquidate the company.  They contended that the company
had not paid them and that Telesphere was illegally diverting funds.
Telesphere has acknowledged slow payment because of a dispute with
local telephone companies over the "900" fees, but has denied
diverting funds.

        The company has been hurt by bad debts, slow cash flow and a
decline in the popularity of "900" services, as well as the loss of
such business to its competitors, the American Telephone and Telegraph
Corporation, the MCI Communications Corporation, and US Sprint.

        Four years ago, Telesphere pioneered "900" services and by
last year, such services acounted for 59 cents of each dollar of
Telesphere's revenue.  But more recently, revenues had dropped to less
than 35 cents of every dollar.

 
 
 

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Metricom files for bankruptcy protection
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http://news.cnet.com/news/0-1004-200-6442868.html

Metricom leaves $1 billion debt trail
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http://news.cnet.com/news/0-1004-200-6453382.html
--
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