MURDER BY NUMBERS

Three years and out. That was the cloak-and-dagger plan for Teligent, and it entangled everyone—from the media-shy billionaire family and the internationally successful venture capitalist who backed the company to the market-mover CEO and his golden-boy management team. They planned to sell their creation to the highest bidder but failed to anticipate that a lethal combination of greed, inadequate technology, ambitious power plays and conflicting self-interests would trip them up on their way to cashing in.

“Is it Tuesday yet?”

That question became the morning salutation of Teligent employees at the company's Vienna, Va., headquarters in the months before it filed for bankruptcy this May.

Tuesday was supposed to be payday for Teligent. The firm had been scrambling for the few hundred million necessary to keep running through the end of 2001, and director of business development Stanley Manoogian was so confident that at one point he said the funding would arrive on “Tuesday.”

Tuesday never came.

It was a bitter irony for a company that launched five years earlier with such promise that most involved expected to get very rich. Some former employees of Teligent insist that upon their hiring, they were told of an aggressive three-year plan to build out a national broadband fixed wireless network using buzz-worthy technology that would win over frugal enterprise customers in urban office buildings. The plan was to culminate in a sellout to the highest bidder — either a long-distance company looking for low-cost local entry or a Bell looking to acquire small business users and cheap infrastructure to serve them.

“[Mandl] woke up the industry to a real power shift from old telecom firms to new ones, and his leaving, in itself, was an act that was impossible to follow,” said a source....“From then on, anything short of making [Teligent] into another AT&T would be a disappointment.”

Others maintain that the plan was not that specific, but that Teligent was open to acquisition offers from its inception. They say several such deals were proposed in the five years between Teligent's founding and its bankruptcy but that few made it to the stage of serious negotiations. They also say Teligent had many opportunities to close new funding rounds or merge with smaller firms, right up until the company went bankrupt. But a combination of bad timing, sudden economic decline and the colliding self-interests of certain board members prevented anything from coming to fruition.

Teligent started with big names, state-of-the-art technology, a distinct business plan and shrewd backing — elements that usually lure lucrative offers. But it watched every potential payday come and go.

The “Tuesday” funding that never arrived was the last attempt made to save the company by Alex Mandl, Teligent's first and only chairman and CEO to that point. By early April, Mandl — the man who once stood at the head of the line for the most powerful job in telecom, the chairmanship of AT&T — was unemployed.

At AT&T in 1996, Alex Mandl was the equivalent of Lou Gehrig in his prime, a superstar waiting in the on-deck circle while Babe Ruth did his business. Robert Allen, then 61, had the top job at the world's most successful telecom firm, and he hung on to it with petulant relish.

But the 52-year-old Mandl had enough with being No. 2. The dough-faced, gruff but good-natured executive who had orchestrated the stunning merger that created AT&T Wireless pulled another shocker: He was leaving to head up a virtual unknown called Associated Communications. The start-up, renamed Teligent soon after Mandl joined, had only a dubious collection of wireless licenses for unwanted frequency bands and a vague notion of crafting an architecture that would allow fixed wireless access. It was as if the company was not sure what to make of itself.

That made Mandl's move from a fairly certain, if not immediate, ascendancy to the chairmanship of AT&T even more of a mystery. And it instantly bestowed on him much more of a reputation as a rainmaker than, in hindsight, he probably deserved.

“Alex woke up the industry to a real power shift from old telecom firms to new ones, and his leaving, in itself, was an act that was impossible to follow,” said a source who has followed Mandl's career. “From then on, anything short of making [Teligent] into another AT&T would be a disappointment.”

People who know him said Mandl thought all the media attention his move garnered was “inappropriate,” starting with reports that he had received a signing bonus of $20 million, an 18% equity stake in Associated Communications and a $500,000 salary. In reality, Mandl received $15 million intended to partially cover compensation he was losing by leaving AT&T, and his equity stake in the new company was much closer to a standard 6% to 10%. However, sources say the $15-million payment was worth about $7.5 million after taxes, and that Mandl immediately invested $5 million of that sum into his new company.

As for his reason for leaving AT&T, Mandl told Telephony in August 1996 that he had always been very interested in building something from the ground up — not worrying about changing and downsizing but building something fresh, the way I think it should be done.” It was a carefully worded statement, and tinged with his persistent Austrian accent, each word weighed a ton.

Mandl's sense of nobility and his faith in important but admittedly risky causes — entrepreneurship and competition — were very new to telecom in 1996. “He thought it would be fun, interesting and challenging, but he also saw the risk,” said a friend. However, Mandl clearly expected a healthy payday in the end. He didn't say anything about a three-year build-for-buyout plan, and friends say he still scoffs at suggestions that such a plan existed. Still, other former Teligent executives said there is some truth to the scenario.

“Externally, the face we put on it was that we were building the company as a stand-alone business, but internally, we were creating an infrastructure that would be seen as a value to a large carrier, and then we would sell it,” said one former Teligent executive.

In any case, with Mandl aboard, Teligent was considered industrywide as the smartest bet in the new, explosive competitive carrier sector. That perception would drive the company's board to press for an IPO as soon as 1997 — an event Mandl wanted to put off much longer to build up the business and roll out markets. The buzz also seduced an amazing array of firms and personalities, including the biggest software company on the planet, one of the nation's premier buyout firms, Asia's most dominant telco and cable's most intimidating corporate cowboy.

Several sources familiar with Teligent say pressure to pursue a buyout plan and monetization events like an IPO came from Teligent's two initial investors: the Associated Group, which owned 55%, and Telcom Ventures, a venture capital outfit that owned the remaining 45%.

The two firms could not have been more different. In fact, they would come to represent the confluence of diverging interests that defined Teligent for the next five years and ultimately contributed to its downfall. (No one affiliated with either company could be reached for interviews.)

Founded in 1979, the Associated Group, based in woodsy Bala Cynwyd, Pa., was the more conservative of the two. Owned by the Berkmans, a billionaire family characterized by its technology-savvy investing and media-shy behavior, the firm was never counted among the telecom titans of the last decade or any other. But for nearly 60 years, the Berkmans enjoyed healthy longevity and consistent success with investments that defied their low-key nature. The family's reach at various times included stakes in cellular, cable TV, Internet and technology development companies. All the while, the Berkmans steadfastly avoided the spotlight, refusing press interviews that would help promote their holdings.

The Associated Group's instincts for buying into the right technology — and, more important, for selling out for a huge profit — were peerless. In one defining deal, the Associated Group sold a collection of cellular properties it had amassed cheaply during the 1980s to SBC Communications in 1994 — when the value of such properties was nearing its peak — for about $800 million.

Initially, this Midas Touch belonged to Jack Berkman, a Harvard-educated lawyer and entrepreneur. Among Berkman's most legendary moves was the acquisition in the 1970s of several cable properties that he later sold to Tele-Communications Inc. (now TCI) in an all-stock transaction that made the Associated Group one of TCI's biggest investors. The sale also started a relationship with TCI Chairman John Malone that would pay off more than once for the Associated Group.

By all accounts, Berkman's wife Lillian also had a hot hand for business, taking an active interest in the firm's investments and sitting on several boards, including the Sterling National Bank of New York and Allied Stores. She also was a fellow of the Metropolitan Museum of Art. The elder Berkmans were lauded philanthropists whose grants included a $5.4-million bequest to Harvard Law School for the creation of the Berkman Center for Internet and Society.

Jack and Lillian Berkman are now deceased; by the mid-1990s, control of the Associated Group had passed to their son Myles, who managed the firm's investments with his sons, Billy and David Berkman. None of the Berkman brilliance for financial management was lost through the generations.

By 1996, the Associated Group had collected unused wireless spectrum in the 18 and 24 MHz frequency bands, figuring the cheap licenses might eventually prove useful. That's how the Berkmans ran into Rajendra Singh, a financier doing exactly the same thing.

If the Associated Group was the conservative, old-money half of Teligent's original equity team, Singh was the high-stakes risk-taker. He grew up in the Indian state of Rajasthan, in Kairoo, a village that had no electricity or telephones. Singh attended college in the U.S. and in 1983 founded the RF engineering firm LCC International with his wife Neera.

Over time Singh became recognized as an expert in application of wireless spectrum for mobile and fixed deployments. With his profits from LCC as seed funding for other start-ups, Singh started a fledgling venture capital operation, Telcom Ventures, out of his LCC office space. When he met the Berkmans through the FCC's spectrum licensing bureau, they realized they could merge their license holdings and create a wireless company of national scale.

Singh liked to think big. People familiar with his involvement in Teligent say Telcom Ventures and a somewhat labyrinthine stable of other firms — including Digital Services Inc., Microwave Services Inc. and Telcom Internet Ventures — had established a pattern of coaxing their start-up investments to accelerate business plans and rapidly build assets, such as networks or equipment, that would quickly give the young companies enough value for a monetization event like an IPO or merger.

Having merged their spectrum collection, the Associated Group and Telcom Ventures needed a big name to attach to it — an executive who would bring instant notoriety and cachet. It had to be someone with the ambition, will and experience to build a big company quickly and manage it effectively. The job had Alex Mandl's name written all over it.

Mandl had been in the telecom business for only five years, having joined AT&T as chief financial officer in 1991. But he was a seasoned executive who had successfully guided shipping firm Sea-Land, and in his brief telecom career, he wowed industry observers by leading AT&T's $11.5 billion acquisition of the nation's top wireless company, McCaw Cellular.

In 1996, unlike today, AT&T still seemed to be a global super-carrier on the rise, not only jumping to the head of the wireless market but indisputably controlling the long-distance business, with a growing Internet business in AT&T WorldNet. AT&T also had strong prospects for controlling the newly competitive local services market and burgeoning foreign markets.

But the passage of the Telecom Act of 1996 brought signs of a shake-up. In the months following its approval, new companies landed funding and new jobs were created. Chairman and CEO seats cushioned with stock options were there for the taking, and the top job at Associated Communications was just one of them.

As telco executives found themselves on a faster track to professional success, industry fame and personal wealth, it became clear to Mandl that he would not have to wait for Robert Allen to ride into the sunset. He could become king right then.

People who knew Mandl at AT&T say he was driven by a strong sense of professional competitiveness stoked largely by nemesis Joe Nacchio — a man whose arrogant style Mandl reportedly loathed. Nacchio would soon leave AT&T for greater riches and acclaim as the CEO of start-up Qwest Communications. If there ever was a time for the normally reserved Mandl to let himself show some unrestrained ambition — and even a little greed — this was it. His mission: take the spectrum licenses owned by the Associated Group and Telcom Ventures and create a business plan around them.

Mandl spent his first six weeks on the job in a tiny office within Singh's Telcom Ventures space at the LCC headquarters in McLean, Va. Mandl and his new employers knew the company would need as many differentiators as possible to separate it from a growing pack of competitive carriers. The strongest was fixed wireless local access.

A national broadband fixed wireless network was something that only Winstar Communications had dared try to that point. Fixed wireless architectures were virtually unproven in large, commercial deployments. But the technology was advancing, and the deregulation of the local exchange market was further incentive for new companies with low-cost, big-bandwidth architectures to enter the fray.

Today Mandl defends the choice to pursue such a costly, aggressive and risky network buildout. “It was what the capital environment wanted at the time,” he said. “Being small wasn't the thing to do back then. We would have had no traction in a very competitive market and would have defaulted our first year. People would not have given us a chance.”

But Teligent was admittedly starting from behind, another reason to spend whatever money it needed to build up as quickly as possible. Over the next four years, Teligent ambitiously built out its networks in more than 40 of 74 planned U.S. markets. In 1998 and 1999 alone, the company spent $256 million on network equipment and more than $41 million on office rent for equipment and rooftop leases for its antennas, according to SEC filings. Money not spent on the network was channeled into a marketing and advertising blitz that quickly built an unknown corporate brand into a recognizable one.

The company also was aggressive in its hiring, going from less than 30 employees at the end of 1996 to 300 in late 1997 to more than 3000 by 2000. Among the first hires was an array of talented and experienced executives whose participation helped turn up the buzz on Teligent — people like Kirby “Buddy” Pickle, a former MFS executive who joined as chief operating officer, and Keith Kaczmarek, the former AirTouch and PrimeCo executive considered one of the industry's young wireless technology wizards, who signed up as senior vice president of engineering and operations.

Also, as investors and the board had hoped — but reportedly to the chagrin of Mandl — Teligent took advantage of a burgeoning IPO market, going public at $27 per share in November 1997.

Things were happening more slowly on the technology development front, though no one was too concerned at the time. In seeking to establish a technology edge, Teligent forged a plan to use a point-to-multipoint fixed wireless architecture. Though fixed wireless networks of the time primarily used point-to-point configurations, the point-to-multipoint products in development during the late 1990s promised to be much more cost-efficient and offer greater and more flexible bandwidth.

It was the kind of differentiator Teligent needed. The problem was that technology developers were not ready to deliver point-to-multipoint solutions. Only one vendor, Nortel Networks, said it could deliver in a time frame defined by months instead of years. To make that pledge, Nortel had to buy a small Texas firm, Broadband Networks Inc., that was at the forefront of point-to-multipoint. Despite what seemed like an under-ripe, unstable market for point-to-multipoint products, Teligent named Nortel its primary vendor.

“For Teligent, point-to-multipoint was like a Holy Grail, and they thought they could pressure Nortel into meeting their deployment demands,” said an executive at another fixed wireless vendor. “It was a smart move for Teligent because they probably figured they could get a big vendor like Nortel to pay for alternatives like T-1s if their system didn't work or was late.”

By the end of 1998, Nortel and Teligent had successfully tested a point-to-multipoint system, but early the following year, Teligent started having problems as it began commercial deployment. A former Teligent engineering employee said, “It was way too complex to install. It was taking us 90 days to set up service and that was way too long.”

Costs were mounting. To acquire customers quickly, Teligent's policy was to sell customers landline T-1 service first and later replace that with fixed wireless. As a result, Teligent was leasing T-1s from local Bell companies, often at prices of more than $1000 per circuit. And because the equipment “wasn't really carrier-grade at that point,” according to the Teligent engineering source, the T-1s were often left in place as backup.

Though Nortel paid penalties for late delivery and also eventually paid some of the T-1 back-up costs, the source said, “Leased-line costs turned out to be one of the biggest elements of our on-site deployment cost.”

Some wondered why Teligent didn't decelerate its aggressive buildout and wait for the technology to be fixed, but for a public company that was valued at more than $100 per share by March 1999, it was too late to slow down. Teligent had to keep spending money on developing and expanding its network while signing customers to show it was bringing in returns, no matter how wide the chasm between its staggering costs and modest revenue.

In late 1999, Mandl and his management team went out to attract new investors. Teligent eyed some big name firms for the new round, hoping to close a deal large enough to guarantee it would never need outside funding again. Among the potential investors Teligent executives visited was software colossus Microsoft, which was developing software to support broadband services but also had been aggressively seeking investments in broadband service providers.

Also courted was the legendary Dallas-based buyout firm Hicks Muse Tate & Furst, which already was known for investing millions in telecom upstarts such as ICG Communications, Rhythms NetConnections and Metrocall. Other firms in on the pitch included Chase Capital Partners, Deutsche Bank Capital Partners and Olympus Partners, all financing firms that had enjoyed great success investing across a wide breadth of industries.

Teligent already had garnered a $100 million investment from NTT Corp.; this time, it hoped to bring in an investment 10 times that size. Instead, the first letdown in a two-year chain of funding-related disappoints was about to unfold. What happened next created a companywide controversy, led to the resignation of Teligent's chief financial officer and forced Mandl and other executives to re-assess the business' future.

First, there was good news: Teligent's investor pitch was an unqualified success. By the fall of 1999, Microsoft, Hicks/Muse and the other firms agreed to a collective $1 billion investment — a whopping sum, even in those heady days of no-holds-barred funding. The news was riotously celebrated inside the company. But when Mandl took the funding package to Teligent's eight-member board for approval in late fall, the celebration stopped.

In June 1999, the Associated Group — which still owned about 40% of Teligent and controlled four board seats — had announced the biggest deal in its history, agreeing to a $1 billion acquisition offer from Liberty Media, the CATV content firm headed by John Malone and owned by AT&T. The pact left most of the business world wondering why Liberty — a company committed to content — would buy a firm whose single biggest investment was a national fixed wireless network. (Liberty also owns a minority stake in Primedia, Telephony's parent company.)

Some observers even wondered if the deal was a complex charade orchestrated by AT&T so that it could shelve its own Project Angel fixed wireless project (which reportedly had stalled for cost and technical reasons), acquire a piece of the fixed wireless future in Teligent and buy back Mandl all at once. But AT&T's use of Liberty Media as a stalking horse didn't add up.

A more likely scenario: Malone had answered the call of the Associated Group, now looking to cash in on all of its investments. From its previous sale of cable programming properties to TCI, the Berkmans had received large amounts of TCI stock, which earlier in 1999 had been converted into stock in both AT&T and Liberty Media upon AT&T's acquisition of TCI.

“The Berkmans became significant enough investors in TCI that they probably could have called in a favor from Malone if they needed it,” said a source familiar with the Associated Group.

...uncomfortable with the naked ambition and risk of Teligent's business plan and worried about the return on their initial $50 million investment....The Associated Group had decided to get out of Teligent while the getting was very, very good.

It's uncertain whether Teligent's aggressive spending had anything to do with the Berkmans' willingness to cash in the Associated Group's chips. Teligent employees agree that among investors and board members, Rajendra Singh was the strongest and most vocal advocate of a plan for Teligent to spend large volumes of money quickly and build up assets for buyout. These sources say the Associated Group — specifically Myles, Billy and David Berkman, who filled three of the four seats the firm controlled on Teligent's board — were uncomfortable with the naked ambition and risk of Teligent's business plan and worried about the return on their initial $50 million investment, even though Liberty Media's $3 billion offer for the Berkmans' firm valued the Associated Group's stake in Teligent at $1.4 billion.

The Associated Group had decided to get out of Teligent while the getting was very, very good.

The Liberty Media/Associated Group deal may not have been much on Mandl's mind when he proudly took his $1 billion investment package to his board that fall, but it should have been. The board shocked Mandl and other Teligent executives by turning it down.

Sources familiar with the board's deliberations say the three Berkmans balked at the $1 billion package because it would have diluted the Associated Group's stake in Teligent and, ultimately, any stake of the Associated Group that Liberty Media would hope to acquire in a deal that was not scheduled to close until January 2000.

Another source said the Berkmans' dismissal of the funding deal occurred for different, though no less selfish, reasons: The family had always strived to keep the Associated Group legally defined as an operating company rather than a holding company because the reporting requirements for holding companies are much more stringent. However, the operating company designation required that the Associated Group hold a significant investment in another operating company and also maintain representation on that company's board. Teligent was its only investment where that was the case. A $1 billion cash infusion from other investors would change that status.

That case is hard to prove, however. Teligent wasn't facing immediate funding concerns at the time, and even Mandl said, “The Berkmans had the right to make any judgment they wanted to make about the funding deal. In hindsight, it was a terrible decision to turn it down because Teligent would have been fully funded, but at the time, some good arguments undoubtedly could have been made.”

Another former Teligent executive said Mandl pleaded with the Berkmans to accept the deal because the full amount would see the company through to profitability. When the Berkmans turned Mandl down, he was tremendously disappointed.

The board instead voted to accept $500 million from the same sources, and Microsoft, Hicks/Muse and the others went ahead with the deal. At least one Teligent executive, chief financial officer Abe Morris, was livid enough to quit. He reportedly felt the Berkmans were too conservative about funding and overprotective of their own investment. “Abe was the epitome of frustration,” said one of his former colleagues. Another adds, “Alex and Buddy felt the same way, but they thought they still had plenty of chances to get the funding they would need.”

The three-year plan now a distant memory for everyone except the Berkmans, Teligent executives hit the highway in March 2000 to pitch a secondary stock offering. By some accounts, the road show did not go well. “They had spent so much money and were showing little revenue at that point,” said one industry observer. Mandl was concerned the capital markets were beginning to soften, so he tried to move quickly with the offering and sought board approval to access money from a high-priced credit facility. Sources say he believed the company could raise about $250 million.

Again, though, the Berkman-controlled board stood in his way. Sources say the Berkmans felt the market softening as well, thought the timing was bad for a stock offering and insisted the company not create more debt by accessing funding through a credit facility. Though executives from Liberty Media now occupied three of the four seats the Berkmans controlled, with 35-year-old David Berkman filling the fourth, the family exercised its influence again and shot down the plan.

“Again, in hindsight, they should have let this funding happen, but they may have seen other potential sources such as an acquisition,” said a former Teligent senior executive.

The...complex...merger between Teligent, ICG Communications and Rhythms NetConnections.... would have aided all three companies with their funding woes....[But] just days before all three companies were set to announce merger plans, due diligence turned up inconsistencies in how ICG had been tabulating and reporting its revenue.

In fact, proposals for acquisitions of Teligent by other firms, and acquisitions that Teligent could make to access other companies' assets, were on the horizon. It was not a new idea. As early as 1997, Teligent had briefly entertained the idea of selling out to WorldCom. Some say the offer was never serious, while others say it would have been very lucrative and that Teligent walked away because it saw even greater riches in its future.

As it turned out, 2000 would be a year of mergers and industrywide consolidation, beginning in April with a sudden sharp dive in the stock market and the economy.

Around that time a merger offer surfaced that was attractive to the Berkmans and other Teligent board members. The proposed deal was a complex three-way merger between Teligent and two other companies in dire funding straits, ICG Communications and Rhythms NetConnections.

The merger would have aided all three companies with their funding woes, and — given the landline circuits the other two companies possessed in different regions — helped Teligent avoid the expense of leasing T-1s from the Bells. The board gave its blessing, and the next six months were spent negotiating and conducting due diligence.

It would all be a waste of time. Just days before all three companies were set to announce merger plans, due diligence turned up inconsistencies in how ICG had been tabulating and reporting its revenue.

“It was a bad situation,” said a former Teligent senior executive. “The math didn't work. And this was the deal that the board actually wanted us to do.”

Adding to the pain was the fact that Teligent and ICG had exchanged $62 million worth of stock as a precursor to the full merger, according to SEC filings. Within months, this stake would be worth just $400,000.

A dire funding situation was made worse by the fact that Teligent had put its search for other funding options on hold during the merger negotiations. Employees were again devastated by the news.

There would be other acquisition proposals. Teligent reportedly proposed to buy yet another troubled landline carrier, e.spire Communications, but that deal never came about. After the three-way merger fell apart, Teligent executives started getting restless. Pickle took a CEO post at PF.Net (now Velocita). Kaczmarek left just before the collapse of the Rhythms/ICG deal, disenchanted with a project that called for him to manage a couple of very small Teligent acquisitions. He also told people that he didn't want to take part in the huge integration the Rhythms/ICG deal would require. A succession of chief financial officers came and went, likely driven out by Teligent's recurring funding frustrations.

By now, investors that once supported dreamy, expensive business plans like Teligent's would no longer back anything that didn't show a clear path to profit. And Teligent couldn't show it. But in December 2000, Mandl pitched a deal involving as much as $700 million in new funding from current investors, including Liberty Media, Hicks/Muse and Singh, who along with his wife controlled two seats on Teligent's board.

Another critical piece of the puzzle: Lucent Technologies would commit to a financing deal, reportedly worth $200 million. In addition to having made progress with its own fixed wireless equipment, Lucent had connections to Mandl — his wife Susan worked there, and he once had authority over the company in the early 1990s when it was still a division of AT&T. Mandl also had a backup plan to access $250 million from a closely-held Bala Cynwyd-based financing firm, Rose Glen Capital Group.

The package looked promising to the Liberty Media representatives on Teligent's board, but John Malone had other ideas. After Teligent's three-way merger fell apart, Liberty acquired a stake in ICG with hopes of turning that company around. But by December, ICG was filing for bankruptcy.

Liberty Media also had made another strange investment, a 9.9% stake in discount long-distance firm IDT that related to a complex investment exchange between IDT, Liberty and AT&T. The deal drew particular disapproval over what seemed to many an inflated valuation of an IDT subsidiary, IP voice company Net2Phone. Between the ICG fiasco and criticism over the Net2Phone deal, “Malone was livid and didn't want to get burned again,” said a source. Malone nixed the idea of sinking any more money into Teligent. Hicks/Muse, already torched by previous investment decisions gone sour, also dropped out, and eventually Singh did, too.

Some sources familiar with the funding deal say Malone's role in its demise is overplayed. They say the real deal-killer was Lucent's own financial problems and failure to carry out their vendor financing commitments; with that element gone, other investors lost confidence.

That left Rose Glen. The firm was known for investing in high-stakes companies on the skids, and said it would invest $250 million in Teligent if stock prices stayed level at a modest $2 per share. But by early 2001, Teligent had dropped nearly 100 points on the year, briefly skating around the $2 mark before dipping lower. Teligent could not access the money.

David Berkman was also a member of Rose Glen's advisory board. A not-so-small world was made smaller by the extensive influence of a billionaire family, although former Teligent executives say Berkman disclosed his Rose Glen affiliation and recused himself from board discussions about the Rose Glen funding.

Without funding coming from existing investors and his backup plan falling apart, by early 2001 Mandl was thinking about quitting. He talked to board members, telling them it was time to leave and that the company needed a fresh perspective. However, Mandl pledged he would not move on until it was the right time — the right time being the arrival of new funding or new leadership.

Then a potential financial savior showed up in the form of Howard Jonas, the New York City-bred one-time hot dog vendor who founded IDT Corp.

It's unclear how the ensuing deal developed, but IDT acquired Liberty Media's stake in Teligent in late March, a stake that gave IDT about 38% of the company and board control. The firm had a pattern of investing in distressed properties — they also picked up Liberty's stake in ICG. Mandl left Teligent shortly thereafter; prior to the deal's completion, he phoned Jonas and announced that he was planning to leave when IDT came in. IDT then installed a new CEO, Yoav Krill, formerly managing director of its European division.

Teligent filed for bankruptcy in early May, and the IDT contingent immediately put together a proposal to acquire the company for $250 million. Teligent employees were reportedly shocked at the bargain-basement offer, though they knew that their firm had lost much of its worth. But in another unpredictable turn of events, Teligent's creditors turned down IDT's offer in July. Later that month, a spurned Jonas and his IDT cohorts quit Teligent's board, and Krill vacated his CEO seat a few days after.

Finally — and ironically — only in bankruptcy was Teligent at last able to leave behind the stigma of selfish investors and board members who sought to control and manipulate the young company to pursue their own agendas.

Teligent remains in bankruptcy as of this writing, but employees, investors and creditors now have more hope for the future than in a long time. In late August, a group calling itself Teligent Acquisition Corp. and led by 38-year-old Jim Continenza, Teligent's current chief operating officer and highest-ranking remaining executive, proposed to purchase the majority of the company's assets for about $115 million. TAC has declined to discuss its plans in detail but said it wants to pursue a more modest, scaled-down version of Teligent's original business plan. If the TAC bid is accepted by the U.S. Bankruptcy Court (the auction is scheduled for Oct. 11) and by Teligent's creditors, a new company, re-financed and possibly re-named, will emerge. It is unclear if the new firm will continue to push point-to-multipoint technology, which is finally maturing to commercial viability. Also, sources familiar with the TAC's plans say the company could stop offering local voice service and re-focus efforts on data and long-distance service in some markets.

Some wonder if Mandl might eventually return to Teligent. They say they would like see him vindicated by critics who believed his poor management — rather than politically charged funding failures and technology problems — was the company's undoing. Others say he believes Teligent is now Continenza's show: At the urging of his wife, Mandl hired Continenza after Pickle left Teligent last fall. (Continenza previously worked at Lucent in a financial capacity and reported to Susan Mandl.)

Though it remains to be seen whether the TAC's buyout plan will be accepted, a more modest approach could serve a new Teligent well. Modesty and self-control certainly were never hallmarks of the old Teligent, an entity that did not believe in taking a slow, methodical approach to anything.

The people who treated Teligent's assets and prospects as their personal toys are long gone. IDT still maintains a majority stake, and some sources say they have not ruled out an eleventh-hour bid for acquisition.

The Berkmans are no longer affiliated with the company's board or management. David Berkman left the board when Liberty sold its stake to IDT.

Malone has much more on his mind — like the status of his AT&T stock — than just Teligent.

Singh left Teligent's board but still controls two seats and still has money in the company. He and Mandl also remain friends, although Mandl is said to have no interest in keeping up a relationship with the Berkmans.

Most other former Teligent executives have moved on to other corporate adventures.

Mandl said he is very interested in returning to a CEO job and has considered a number of offers, though he is not in a hurry. He sits on the boards of several companies, and also manages an angel investor fund called ASM Investments with his wife.

Mandl said if and when he does return to the spotlight, his chief consideration will be his level of comfort with the people he will be working for and with — something he admits was not top of mind when he joined Teligent.

A former senior Teligent executive sums up the Teligent experience as lessons learned.

“We could have had the funding we needed, but the board didn't give us the flexibility. If we would have had more flexibility to do the things we wanted to do, I think it would have worked, but people made the decisions they had the right to make at the time, so what can you do? You can't always be looking back.”

Mandl, like so many others in the Teligent saga, came in to get rich. For a while, it worked. Mandl said that at its peak, his personal stake in Teligent was worth $500 million. It is worthless now. He never sold one share.