The demise continues

(Telephony) After weeks of a steady downward spiral, NorthPoint Communications filed for Chapter 11 bankruptcy protection yesterday. To make matters worse, the Nasdaq placed NorthPoint stock on a so-called “additional information requested” status. Nasdaq has now stopped the sale of NorthPoint stock until the troubled company provides that additional information.

As allowed under Chapter 11, the company has secured $38 million of Debtor in Possession financing to enable it to continue on with its day-to-day operations. Of that amount, $25 million is expected to be available shortly, with the remainder to be made available once certain conditions are met, according to Liz Fetter, president and CEO of NorthPoint.

“This DIP financing means that we have sufficient resources to meet our immediate operating requirements and take us through completing a structured sale of NorthPoint,” Fetter said.

The company places much of its current financial disarray on Verizon’s termination of the two companies’ merger agreement. Without Verizon in the picture, the company is now actively looking for another “partner” to buy its business and assets.

So far, the company has reduced its workforce by 19%, sold its interest in VersaPoint to Versatel, and has sold its stake in NorthPoint Canada to Call-Net Enterprises. Both sales were made for cash.