Internet access provider
(PSIX: OTC BB) said on Friday that it has filed for Chapter 11 bankruptcy protection in light of rapidly declining demand,
The company joins several other tech firms hurt by competition, the inability of customers to pay their bills and the inavailability of capital.
The Ashburn, Va., company and 24 of its units filed for protection in the
U.S. Bankruptcy Court for the Southern District of New York
late on Thursday,
reported. Analysts said such a move had been expected for several months.
"We expect that the steps we are taking today will provide us with the flexibility and time to explore all strategic alternatives while we continue to deliver the reliable service upon which our customers depend," President and CEO Harry Hobbs said in a statement.
"They lost the confidence of the Street, had too much debt and were burning through too much cash," Jonathan Savas, director of high-yield telecommunications research at
, told Reuters.
At the time of the filing, PSINet had total assets of $2.2 billion and total liabilities of $4.3 billion, of which $2.9 billion is bond debt,
reported. It had cash assets of about $300 million.