The U.S. Department of Agriculture will work with the Department of Justice to “protect the federal government’s interest” in being repaid for a loan issued to Open Range Communications.
When Open Range filed for Chapter 11 bankruptcy protection on Thursday, the Greenwood Village- based rural wireless provider listed about $114 million in assets and $110 million in debts.
The U.S. Department of Agriculture had given Open Range a $267 million loan under the Rural Utility Service’s broadband loan program in January 2009.
The current balance of the loan is $73.5 million. The USDA’s rural development program has a priority interest in Open Range’s assets so it is first in line among the company’s creditors.
“While we are, of course, disappointed this company did not succeed, rural infrastructure loans are essential to economic development in many communities . . . and 99 percent of these loans are repaid successfully,” USDA spokesman Justin DeJong said in a statement.
Open Range has laid off 126 of its 174 employees, chief executive Bill Beans has resigned and is providing limited consulting services, and chief financial officer Chris Edwards has taken control.
In a bankruptcy filing document, Edwards, in part, blamed the company’s financial problems on “sporadic” funding from the loan. Other problems include more nonpaying customers than anticipated and an inability to gain broadcast spectrum.
Edwards said in the document that attempts will be made in the next month to sell the company. If no buyer is found, he said, the company will shut down its network, which would take about three months.
Ann Schrader: 303-954-1967 or aschrader@denverpost.com
