(Updates with excerpt from court papers in third paragraph.)
Oct. 6 (Bloomberg) -- Open Range Communications Inc., formed to provide high-speed wireless Internet service to rural communities in 17 states, sought bankruptcy protection from creditors after failing to retain funding and bandwidth.
The Greenwood Village, Colorado-based company won approval in 2009 for a $267 million U.S. Department of Agriculture loan for rural utilities development. An arm of JPMorgan Chase & Co. also invested $100 million in the company, Open Range said.
“The company’s momentum was, however, substantially adversely affected” by a contractor’s wireless-spectrum problems and the USDA loan was withdrawn, Chief Financial Officer Chris Edwards said in a filing today in U.S. Bankruptcy Court in Wilmington, Delaware.
Open Range said it will either sell its network or shut down and liquidate. The company listed assets of about $114 million and liabilities of about $110 million in today’s Chapter 11 filing. Open Range had an operating loss of $50.4 million last year on sales of $1.7 million.
The company’s largest unsecured creditors include Adesta LLC of Omaha, Nebraska, owed $7.57 million, and Velocitel Inc. of Cary, North Carolina, owed $5.59 million, both in trade debt. JPMorgan Chase’s One Equity Partners, based in New York, has a claim for $2.78 million in management fees.
The case is In re Open Range Communications Inc., 11-13188, U.S. Bankruptcy Court, District of Delaware (Wilmington).
--With assistance from Bill Rochelle in New York. Editors: Stephen Farr, Andrew Dunn
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