NC Telecom files for bankruptcy
NC Telecom, the Meeker-based company hired in 1999 to bring high-speed Internet access into Northwest Colorado, filed for bankruptcy Friday.
Rick Heming, NC Telecom general manager, said the filing will not affect the company’s services, which include Internet access for Moffat County government entities, the Colorado State Patrol and private users.
Filing for Chapter 11 means the company can continue operating while it restructures its finances.
U-Bet wireless, a local cellular service affiliated with NC Telecom, will not be affected by NC Telecom’s filing, he said.
Heming said all four of the company’s employees will be retained.
New bankruptcy laws went into effect Monday, but Heming said the company’s decision to file one business day before the laws took effect was just a coincidence.
Heming said the company filed for Chapter 11 bankruptcy because it was unable to renegotiate an $11 million debt to the federal government.
NC Telecom spent the past eight months trying to renegotiate the loan, which was issued by the Rural Utility Service but couldn’t reach an agreement that worked for both sides.
Part of the problem, Heming said, was that the new terms offered by the RUS were out of the company’s financial reach.
“There is no sense renegotiating the loan if our cash flow situation doesn’t allow us to pay it,” Heming said.
Moffat County contracted NC Telecom in 1999 to bring Internet service to the new Public Safety Center and county entities.
State grants were awarded to NC Telecom to run high-speed Internet lines from Rifle to Craig. Other Internet providers also use the lines.
NC Telecom was late delivering services to the safety center and county entities.
Because NC Telecom was late providing services, Moffat County held $700,000 in prepaid services in an interest-bearing escrow account.
Former Moffat County Commissioner Marianna Raf-to–poulos said the money was put in the escrow account to assure the county that services would be delivered.
What the bankruptcy filing means for the county’s prepaid money is unclear.
Moffat County Com-mis-sioner Darryl Steele said he wasn’t sure what effect the filing will have on county Internet services.
County Attorney Kathleen Taylor was out of town Tuesday when county officials learned about the filing. Steele said one of the first things he will do when Taylor returns Wednesday is sit down and look at the county’s contract with NC Telecom.
Heming said he too is unsure what the filing will mean for the county’s prepaid services money, but he plans to meet with county officials in the next 10 to 14 days to figure it out.
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