RCN employee objects to disclosure statement over employee stock plan

By Jeff Pines

Washington, Sept. 23 - An RCN Corp. employee filed an objection to the company's disclosure statement because of alleged violations of the federal Employee Retirement Income Security Act.

Debra Craig, the employee, filed her objection with the U.S. Bankruptcy Court for the Southern District of New York on Wednesday. She wants the judge to deny confirmation of the plan.

Craig also filed a claim in which she says RCN, a Princeton, N.J.-based telecommunications provider, failed to protect the assets of the employee stock plan, which invested in RCN stock. As RCN fell deeper and deeper into trouble, its stock became an "imprudent retirement investment," Craig said.

In addition, the disclosure statement does not disclose claims by the savings plan, its participants and beneficiaries, that RCN failed to take steps to protect and provide for the payment of these claims, if her claim is covered by insurance and if the plan will bar or release Craig's claims against non-debtors, including current or former RCN employees who had fiduciary responsibilities, she said.

The disclosure statement also incorrectly puts the bar date at Aug. 11, but federal law gives governmental agencies, such as the Labor Department, until 180 days after the petition, or Nov. 24, 2004.

RCN filed for bankruptcy on May 27. Its Chapter 11 case number is 04-13638.

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