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| Genuity Faces Bankruptcy as Verizon Ignores an Option by Jeremy at 6:50 am EDT, Jul 26, 2002 | |||
Genuity, the last of the original Big Three Internet carriers, may be about to go the way of its competitors -- into bankruptcy. Stock down 89% yesterday, to 29 cents. Now in default on $3B in loans. Bankruptcy could be only months away. Firm suddenly draws $723M in cash on existing credit lines. Deutsche Bank, refusing to participate, brings federal lawsuit against Genuity to halt the transaction. Verizon says, "Forget It!" about re-acquiring Genuity. This is a perfectly rational decision for Verizon. They figure, "why should I assume $3B in Genuity debt? For billions less, I can buy just as much long-haul capacity through the bankruptcy court liquidations." | |||
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