Wil-Com CEO to stockholders: ``Give me a break''
Wednesday, April 24th 2002, 12:00 am
By: News On 6
TULSA, Okla. (AP) _ Williams Communications' top executive dismissed stockholders' complaints Wednesday, saying the telecom meltdown and not the company's bankruptcy is to blame for their worthless shares.
The Tulsa-based broadband wholesaler filed for Chapter 11 bankruptcy Monday after reaching a deal that splits its remaining equity between bondholders and its former parent company.
When the company expects to emerge from court protection in four months, about 490 million shares of Williams stock will become worthless. That has prompted outcries from shareholders, who formed a committee and hired an attorney to represent their interests in bankruptcy court.
``I'm not happy about what's going to happen to them, but I do understand what caused it: the biggest meltdown ever in our industry,'' Williams chairman and chief executive officer Howard Janzen said at a meeting addressing employee questions about the bankruptcy.
``Give me a break,'' Janzen said, offering his reaction to shareholders' complaints. ``Where have these people been?''
Neal Nelson, a spokesman for a committee of about 4,000 shareholders, said many investors held the stock at Janzen's advice despite its plummeting value.
``As recently as February, upper management was insisting that everything was under control, that there would be no dilution of shareholder value, that we should all stay the course,'' said Nelson, a computer programmer from Wheeling, Ill. ``Now, just two months later, they've wiped out the shareholders.''
Williams stock traded on the New York Stock Exchange for more than $40 dollars a share about two years ago, but has since been delisted and was trading for just pennies over the counter before the bankruptcy.
Spokeswoman Deb Trevino said the decision to exclude shareholders from Williams' remaining equity was made by creditors, not the company.
Williams followed telecom rivals Global Crossing and 360networks into bankruptcy after borrowing heavily to build vast fiber-optic networks.
The zealous building resulted in a perceived oversupply of broadband and rock-bottom prices, which made it difficult for Williams and its competitors to raise enough cash to pay creditors.
Williams had faced a deadline Friday to restructure its more than $7 billion in debt owed to banks, bondholders and former parent Williams Cos., which spun its telecommunications subsidiary off in April 2001.
The bankruptcy aims to erase about $6 billion of debt.
Janzen told about 300 employees, gathered at Tulsa's Performing Arts Center, that neither management nor workers were to blame for the bankruptcy.
Instead, he blamed a debt-laden balance sheet created by Williams Cos., a Tulsa-based energy firm, that left the company poorly equipped to survive the industry's troubles.
Janzen assured employees that business will continue as usual during bankruptcy _ with no layoffs beyond the 800 jobs cut in March _ and that the company will emerge in a stronger competitive position.
Employees leaving the closed meeting, which The Associated Press briefly attended, said Janzen and fellow executives had lifted their spirits.
``I feel really upbeat,'' said Stephanie Hill, a marketing manager. ``I think we're going to come out of it a stronger company.''
Hill, like other employees who were left holding Williams Communications stock, was philosophical about her losses.
``I'm very disappointed, of course, but when you invest, this is a risk you take,'' she said. ``I think (management) did the best they could'' in negotiating the bankruptcy agreement.