Winstar Communications Inc.'s founder, Chair and CEO William J. Rouhana Jr. will bid on the beleaguered company's assets in December. Rouhana was one of two Winstar execs who resigned to bid against several other investors.
Winstar expects to file a motion with the Bankruptcy Court in the District of Delaware today, says spokeswoman Laura Kline. The motion seeks to set up the auction procedures, although Kline said the company hasn't yet announced financial terms.
Rouhana and Nathan Kantor, president and CEO, who joined the company shortly after its founding, resigned to submit their own bid.
"It's their company," she says. "They built this, and they always planned to put in a bid for themselves."
The two will bid against other strategic and financial investors who have an interest in the company, she notes.
Kline says the two have not outlined what a post-auction company would look like if they were to win.
In April, the company filed for Chapter 11 bankruptcy. In July, the court A bankruptcy court gave final approval to increase availability of Winstar's DIP financing to $225 million, about $175 million of which is "syndicated" to Winstar's bank group. The company also launched an employee retention program at the time.
A month later, Winstar announced it would cut 950 jobs as part of a two-part plan to pull out of bankruptcy. Part two entailed the potential sale of the company.
Frank J. Jules, president and COO of Winstar's U.S. operations, will be acting CEO and Steven B. Magyar, presently a Winstar director, will be acting chair.