Tag Archives: bankruptcy

“ATG purchased” in The Olympian with comments by Dave Olson

ATG (OlyWa) Purchased from The Olympian – (pdf) 06/06/02

Scott Wyland from The Olympian article again mentions Zhonka entering the market, “Former OlyWa employee Dave Olson, also unavailable for comment, has said he wants to launch an ISP called Zhonka Broadband, which would offer high-speed connections to Web users.”

Long-distance company ATG purchased

Integra officials say OlyWa service will not be disrupted

SCOTT WYLAND THE OLYMPIAN

Advanced TelCom Group Inc., a mid-sized carrier that gave callers an alternative to Baby Bells, has agreed to sell its assets to repay a chunk of its $206 million debt.

Portland company

Portland-based Integra Telecom will take over most of ATG’s assets, which include property, equipment, customer accounts and labor pool.

Based in Santa Rosa, Calif., ATG two years ago bought OlyWa.net, a local Internet service provider.

ATG laid off OlyWa’s 10 employees by the time it filed for Chapter 11 bankruptcy protection in early May but continued to serve some 1,600 subscribers.

No disruptions

No disruption of service is expected under Integra, including to OlyWa customers, said Gary Cuccio, ATG executive chairman.

Cuccio said he took the helm at ATG six months ago in an attempt to turn the company around, but by then it was too late.

“We grew too fast,” Cuccio said. “We simply borrowed money that we were unable to pay back.” Integra representatives couldn’t be reached on Wednesday to discuss their plans for OlyWa.

Former OlyWa employee Dave Olson, also unavailable for comment, has said he wants to launch an ISP called Zhonka Broadband, which would offer high-speed connections to Web users.

Because of the Chapter 11 filing, the sale can’t be completed until all parties sign off on it, including ATG’s creditors, Cuccio said. That could take one day or several months.

Integra will have the option of changing the ATG name, he said. “Not much will be left of ATG.”

All told, ATG will receive about $20 million for its customer accounts and other assets, about one-tenth of what it owes 13 banks, Cuccio said. Creditors will have to eat the remaining debt, he said.

Other buyers

Three other buyers purchased a small portion of the assets: Cavalier Communications, of Richmond, Va.; Step 7, of Santa Rosa; and TelePacific Communications of Los Angeles.

ATG spiraled into the red when the slumping economy caused small to mid-size businesses — ATG’s main client base — to fold or pull back on spending, Cuccio said.

The mounting debt prevented the company from doing an initial public stock offering needed to boost capital, he said.

ATG had some success competing against big carriers such as 1/2 est, but it lacked the resources these large companies had for weathering an industry slide, Cuccio said. “I think when the downturn hits, they have deeper pockets.”

Dave Olson in “OlyWa office empty” article in The Olympian (2002)

OlyWa office empty – (pdf) 05/28/02 – The Olympian

Article by Scott Wyland from The Olympian foreshadows start-up of Zhonka, “Olson and other OlyWa team members plan to launch a company called Zhonka Broadband, which will offer DSL to customers throughout Western Washington, with the focus being on South Sound.”

Dave OlyWa office
Steve Bloom/The Olympian

OlyWa offices empty

Staff laid off, service could be cut as parent company files Chapter 11

Although OlyWa.net’s work force was laid off due to ATG’s ailing finances, Dave Olson hopes he and some other former OlyWa employees can launch a new Internet service provider.

SCOTT WYLAND THE OLYMPIAN
OLYMPIA —

Advanced TelCom Group Inc., which owns OlyWa.net, has filed for Chapter 11 bankruptcy protection, a move that eventually could leave 1,550 local Internet subscribers without service.

Santa Rosa, Calif.-based ATG has laid off all 10 of OlyWa’s employees, plus a dozen ATG workers in its Olympia office.

Internet users who need technical support must call an 800 number.

Although ATG can solve most users’ problems over the phone, it has no one to maintain or repair the on-site equipment in Olympia, said Dave Olson, former OlyWa co-owner.

“Any hardware failures can’t be handled from afar,” Olson said. “Sooner or later something will happen.”
For instance, Monday he observed a server that handles e-commerce for a group of clients was down, he said.

To override the glitch, someone simply needed to reboot the computer — but there was no one there to do that, he said.

OlyWa is a lower priority for ATG, whose main thrust is offering callers an alternative to buying phone service from utilities such as Qwest, Olson said.

ATG will shut down OlyWa if it can’t find someone to buy the customer accounts, he said.

Two years ago, ATG bought then-5-year-old OlyWa for an undisclosed sum. One of the co-founders, Olson stayed on as a marketing manager.

Of the 25 workers who were employed locally after the merger, one or two salespeople and a phone installer remain, Olson said.

Jeannette Meyer, ATG finance director, said last week’s Chapter 11 filing would have no effect on telephone customers. That includes ATG’s subsidiary, FairPoint Solutions.

However, Meyer wouldn’t say how OlyWa subscribers would be affected.

She acknowledged that the filing compelled the company to reduce costs, including trimming staff. ATG closed offices in New York, Connecticut, Maryland and Virginia.

Under Chapter 11, ATG must reorganize in such a way that it can pay off at least a portion of the debt owed creditors.

Buyer wanted

ATG now is on the hunt for a buyer and will hold off on cutting any more jobs, Meyer said, adding that a new owner could opt to lay off more workers after the sale.

Olson and other OlyWa team members plan to launch a company called Zhonka Broadband, which will offer DSL to customers throughout Western Washington, with the focus being on South Sound.

Olson said he had been waiting for a non-compete clause, which he signed when ATG bought OlyWa, to expire June 15.

But ATG’s Chapter 11 filing has nullified that agreement, at least in spirit, he said. So he plans to rev up the Zhonka venture immediately.

Zhonka, he said, will lure OlyWa users who either will grow dissatisfied with the diminishing service or find themselves with no Internet access if ATG pulls the plug.

Olson said he decided to base the venture on high-speed connections because dial-up modems, aside from being slower and less appealing, demand more workers.

ATG’s financial ills are a symptom of the malaise gripping the entire telecommunications industry, said Dennis Matson, executive director of the Economic Development Council of Thurston County.

Given the sluggish economy, telecom carriers are having difficulty drumming up capital to expand, Matson said. If a company doesn’t show vibrant growth, it can’t attract enough investors to do an initial public stock offering.

Matson bemoaned ATG’s ebbing fortunes, saying he encouraged the company to build a network in South Sound, so residents could have more telecom choices.

“For people in Thurston County, the more options, the better,” Matson said.

Concerns

OlyWa.net subscribers with problems or concerns about their service can call Advanced TelCom Group at 800- 285-6100 or e-mail atgservice@callatg.com.