Excite@Home board members met Thursday to consider whether the company
should file a pre-packaged Chapter 11 plan in order to keep the company alive.
The company has $1.5 billion in debt, but with its
Internet portal business collapsing, cannot sustain it.
A source said that despite layoffs and other cost cuts, Excite@Home is
burning cash at the rate of $1 million a day.
Even if investors that in June lent $100 million don't get their money back as they're demanding, CEO Patti Hart sees no way out, media executives familiar with the company said.
The current propsal calls for an investment fund
controlled by ex-Clinton White House staffer Mike McLarty to immediately inject
$100 million in cash, but only after a Chapter 11 filing protecting him from
The high-speed Internet service would stay alive, but it's not clear whether Hart is planning on keeping the Excite portal alive.
AT&T is considering a counterproposal that would give
the telco more control after spending $5.5 billion for its 28% stake in the
company - a stake now essentially worthless.
AT&T has promised customers and Excite@Home affiliates that the @Home
Internet service will keep functioning.
AT&T has one million customers using the service and Comcast and Cox each have almost as many. Excite@Home wouldn't comment.
- John M. Higgins