RCN retains AlixPartners, gets new chief operating officer

By Jeff Pines

Washington, Feb. 12 - RCN Corp. said it has retained AlixPartners LLC to help it with its restructuring and has hired AlixPartners principal John Dubel as president and chief operating officer.

Meanwhile the grace period for RCN to make the $10.3 million January payment on its 10 1 /8% senior notes due 2010 ends Feb. 13.

Under the indenture, the noteholders will be able to declare a default if RCN does not make the payment.

As yet the company has not issued any updates, and Chris Roberts, Tejas Securities' director of research, believes it's likely RCN will file for Chapter 11 shortly.

"They're going to restructure their balance sheet and it's most efficient to do it under Chapter 11," he said.

At the time the payment was deferred, RCN said it had the resources to pay the interest. It said the decision to defer was made in consultation with its lenders. The company added that it is continuing its negotiations with an ad hoc committee of senior note holders.

Dubel will help the company with its negotiations with lenders and others, RCN said, noting he has extensive experience with turning around large and mid-sized companies with in-court and out-of-court restructurings.

His resume includes stints as chief executive officer of Cable & Wireless America, chief restructuring officer of Acterna Corp. and chief financial officer of WorldCom during its restructuring.

Princeton, N.J.-based RCN provides facilities-based bundled phone, cable and high-speed internet services through its own fiber-optic local network.

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