Savvis Punished After Creditor Files Bankruptcy Petition Against Bridge

Bridge Information Systems was slapped with an involuntary bankruptcy petition yesterday by one of its creditors, and this morning network service provider Savvis Communications (SVVS - Cramer's Take - Stockpickr) paid a hefty price.

Bridge, which owns 46% of Savvis, is evaluating its options, which may include seeking a dismissal of the involuntary petition or trying to convert the filing to a voluntary bankruptcy case. Bridge represented 80% of the revenue Savvis collected for the nine months ended Sept. 30.

Shares of Savvis recently lost 56 cents, or 26.4%, to $1.56 in morning trading on the Nasdaq. The 52-week high is $28.

Bridge, a news and data provider based in New York, has been discussing a recapitalization and debt restructuring plan with its largest shareholder, Welsh Carson Anderson & Stowe, and some of its creditor groups.Highland Capital, one of Bridge's creditors, filed the petition with the U.S. Bankruptcy Court in St. Louis yesterday. Bridge plans to continue to pay employees' pre-petition and post-petition wages, salaries and benefits, and to fulfill its obligations to its clients.

Bridge hired PricewaterhouseCoopers to assist the company with financial restructuring plans and said it has taken "significant steps to improve operations over the last several months."