Metricom files Chapter 11

High-speed wireless data service provider Metricom yesterday filed for Chapter 11 bankruptcy protection from its creditors yesterday as it looks to restructure operations and deal with its heavy debt burden.

According to the filing, the company currently has $900 million in assets compared to more than $1 billion in debt to 5000 creditors.

To oversee the restructuring effort, Metricom appointed Kevin Dowd to the newly created chief restructuring officer position. In a statement, the company said Dowd would be responsible for evaluating, “options for financing the company’s continuing operations, as well as strategic alternatives.”

A Metricom spokeswoman said the company would operating under bankruptcy protection and expects to maintain its existing Richochet network customer base in 15 metropolitan markets. At the end of March, Metricom claimed 40,900 users.

Although she would not comment on specific restructuring measures, selling some or all assets is being considered.

“Our number-one goal is to secure financing,” the spokewoman said. “But the company is doing everything it possibly can to maintain its biggest asset, which is its wireless network in the Richochet service.”

The bankruptcy filing comes as no surprise, as Metricom’s finances have deteriorated rapidly this year. The company said in February that without $500 million in additional funding, it could not continue operations beyond August. In April, Metricom posted a first-quarter net loss of $186 million, or $6.04 per share.

Metricom also has announced two rounds of layoffs that cut its work force of 800 by almost one-half and has weathered the resignations of CEO Timothy Dreisbach, CFO James Wall and Robert Mott, its senior vice president of engineering and manufacturing.

No further layoffs resulted from the bankruptcy filing, the spokeswoman said.

The company’s share price has declined 96% over the past year. Nasdaq halted trading of Metricom stock at $1.82 per share until the company provides additional financial information.