Network Access Solutions Corp., a high-speed Internet company operating under Chapter 11 bankruptcy protection, won approval to sell a major portion of its assets to DSL.net Inc. in a deal worth $14 million.
The agreement, authorized yesterday by Judge Mary F. Walrath of the U.S. Bankruptcy Court in Delaware, includes a $9 million cash payment and a $5 million promissory note in exchange for the Herndon company's network assets and subscriber lines.
In October, DSL.net agreed to buy the assets for $7 million in cash and up to $10 million in liabilities for the assets, but Network Access failed to win court approval of its bid procedures. DSL.net revised its offer and outbid Covad Communications Group Inc. for the assets. Network Access's creditors committee approved the deal with DSL.net in late November.
Network Access provides Internet access to clients from Virginia to Massachusetts and has about 15,000 lines in service, according to a bankruptcy filing. DSL.net, of New Haven, Conn., provides similar services to businesses across the country and said it had $23.9 million in assets at the end of September.
"We firmly believe this acquisition will benefit the customers of both companies and position DSL.net as a much stronger broadband provider both in terms of our network footprint and our customer base," David F. Struwas, chief executive of DSL.net, said in a statement.
Network Access, once a star of the area's telecom sector with a $90 million initial public offering and a stock price that rose above $36 per share in late 1999, has been operating under bankruptcy protection since June.
In July, the firm said it cut its payroll to about 130 employees from 800. In its bankruptcy petition, it said it had $58.2 million and debts of $84.9 million.
The deal is expected to close in mid-January. DSL.net shares closed at 50 cents yesterday, down 3 cents.