360networks files for bankruptcy protection

In a much-anticipated move, 360networks yesterday filed to reorganize under bankruptcy protection laws in Canada and the U.S.

Though the filings were made with the intention to reorganize, 360networks has other options. The company has retained the services of Lazard Freres to help develop and evaluate alternatives during the bankruptcy process, including asset sales.

360networks plans to initiate insolvency proceedings for certain of its European subsidiaries. According to a spokeswoman, the company’s North American operations will now be the focus of the 360networks’ business.

“We haven’t made any formal decisions regarding the other regions, but we can say we will be focusing primarily on the North American network,” she said.

In fact, the $155 million of unrestricted cash, cash equivalents, short-term investments and marketable securities the company has on hand will be used to maintain service and complete certain portions of its network in North America.

The filings are the latest in a string of bad news coming from 360networks in the last few weeks. On June, it skipped an interest payment on its senior notes, and yesterday announced a 44% cut in its work force. The Nasdaq halted trading on 360networks’ stock after the bankruptcy announcement with the stock price at 21 cents.

In addition to the bankruptcy filings the company announced the resignation of seven board members: Kevin Compton, Glenn Creamer, John Malone, Claude Mongeau, Christian Reinaudo, John Stanton and Jim Voelker.