OKLAHOMA CITY (AP) _ An Internet service company that serves businesses in Oklahoma and Texas has filed for bankruptcy protection.
Attorneys for Logix Communication Enterprises Inc. and its subsidiary Logix Communications Corp. filed for Chapter 11 protection in Houston this week.
``We feel that we'll come out a stronger, more competitive company after doing this,'' said Logix Vice President Leigh Ann Ihrig. ``We don't feel that there's any detrimental impact to our customers and our employees.''
She said the company's 450 employees will not be immediately affected.
Logix provides local, long distance, data and Internet services, primarily to small and medium-sized businesses in Oklahoma and Texas. It has more than 35,000 customers.
Chapter 11 bankruptcy frees the company from the threat of creditors' lawsuits while it reorganizes its finances.
Two other Logix subsidiaries, Dobson Telephone Co. and Dobson Fiber/Forte of Colorado, were not included in the bankruptcy filings and will not be part of the reorganization.
Logix has more than $190 million in long-term debt, including $86.9 million to unsecured bond holders.
In December, Logix failed to make a $5.3 million interest payment while it negotiated with bond holders on restructuring its obligations under 12.25 percent notes due in 2008.
Dobson CC Limited Partnership, another major creditor, provided funding to Logix through loans and stock purchases totaling $157.9 million in 2000, according to a Security and Exchange Commission filing. The partnership also provided more than $13 million in loans and advances to Logix in the first nine months of 2001, the filing shows.
Logix pledged all assets of the company and its subsidiaries to secure the debt to Dobson CC Limited Partnership in May 2001.
Ihrig said Logix was a victim of the rapid boom and bust cycle in the competitive local telephone exchange carrier industry.
``A lot of those entities in that industry took on more debt than they were able to support in a short amount of time,'' she said.
The company estimated it might need $15 million to $20 million in outside funding.