HELENA (AP) - A new high bidder emerged in the Touch America bankruptcy case Monday, with a Canadian firm coming out on top after a judge nullified last week's auction.
360networks of Vancouver, British Columbia, is in line to take over Touch America's assets with a bid of $43 million.
360networks outbid XO Communications and BC Fiber Acquisitions during a Monday hearing in a Philadelphia bankruptcy court. U.S. Bankruptcy Judge Kevin Carey must approve the sale, and is expected to have a final agreement to review by Wednesday.
Touch America, formerly the energy giant Montana Power Co., filed for Chapter 11 bankruptcy protection in June and said it had a deal with 360networks to buy its telecommunications assets for $28 million.
Then on Friday, BC Fiber made a bid of $42 million for Touch America and appeared to be on its way to owning the company. BC Fiber is controlled by Brad Kelley, of Boca Grande, Fla., believed to be the single largest shareholder of Touch America with 14 percent of the company.
But things took a surprising turn Monday _ again.
BC Fiber told the court it had some "hesitation" about closing the deal for Touch America until it worked out details on a contract with MCI. MCI has an agreement to lease fiber lines from Touch America.
Carey said the request amounted to BC Fiber changing the terms of the agreed-upon deal. He told the companies to submit new bids during Monday's court hearing, which lasted six hours.
Both 360networks and XO Communications joined BC Fiber in the new bidding.
Carey said that after each company put a bid on the table, there would be only one additional round of bidding. Last week's auction stretched from Wednesday into Thursday, with more than 20 rounds of bidding.
When the bids came back, both BC Fiber and 360networks offered $42 million bids, and XO Communications bid $42,250,000. Touch America asked that the next, and final, round of bids be sealed. Carey agreed.
In the final round of bidding, BC Fiber stuck with its $42 million bid. XO Communications raised its bid $300,000 to $42,550,000. And 360networks submitted the winning bid of $43 million.
Touch America spent hundreds of millions of money it raised selling utility assets in its disastrous entry into the telecommunications market. Prior to bankruptcy, its stock price plummeted as it hemorrhaged money, it stopped filing financial reports, and was delisted from the New York Stock Exchange.
The firm, once one of Montana's most respected companies, has laid off hundreds of employees this year.
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