Williams Communications Group, Inc. (fka WCGR)

[jmhollen]

Williams Communications Renamed
By CLAYTON BELLAMY
AP Business Writer

TULSA, Okla. (AP)--Williams Communications Group Inc. has emerged from Chapter 11 bankruptcy protection as a leaner, newly named company with new ownership but minus its longtime CEO.

The Tulsa-based broadband wholesaler said Wednesday its reorganization divides ownership of the newly named WilTel Communications Group Inc. between the old company's bondholders and a New York investment bank.

President and chief executive Howard Janzen resigned Tuesday after seven years, a departure that also creates an absence on the company's new board of directors, WilTel said. No replacement was named.

Williams Communications filed for bankruptcy April 22, claiming debts of $7.15 billion versus assets of $5.99 billion. A federal judge approved the reorganization plan Sept. 30.

The company amassed its debt building a 33,000-mile fiber optic network that connected 125 cities on five continents. Its network and others contributed to a glut of broadband that drove down prices, preventing Williams and many competitors from raising enough revenues to meet debt payments.

After bankruptcy, WilTel's bank debt is $375 million, with the only other significant debt related to its Tulsa headquarters building, the company said.

Bondholders will own 54 percent of 50 million new WilTel shares, which replace Williams Communications shares that had been trading for pennies over the counter.

New York investment bank Leucadia National Corp. will control 44 percent of WilTel, after investing $150 million and buying claims held by former parent company, Williams Cos., for $180 million.

``Today WilTel emerges as a financially healthy, industry leader,' the company, which is incorporated in Nevada, said in a statement.

Leucadia's investment will be held in an escrow account until Federal Communications Commission licenses are transferred from the old company to the new one, expected to be completed by February.

Stockholders, who have filed class-action lawsuits, can get up to 2 percent of WilTel equity--plus any money a court may award _ by pursuing claims against company officers' and directors' liability insurance. They can also pursue claims against the accountants and auditors of Williams and Williams Cos., a Tulsa-based energy giant.

Janzen, an engineer, has led Williams Communications since its formation in 1995 and led it through its April 2001 spinoff from Williams Cos. and now through its bankruptcy reorganization.

``Howard is a major reason for the Company's rapid emergence from Chapter 11 and for the seamless management of operations and customer care since the company's founding and over these difficult past six months,' WilTel said.