Touch America files for Chapter 11

New York, June 20 - Touch America Holdings, Inc. said it made a Chapter 11 bankruptcy filing in the U.S. Bankruptcy Court for the District of Delaware.

The Butte, Mont. broadband telecommunications company also said it will sell its Private Line and Dedicated Internet businesses for $28 million, subject to certain post-closing adjustments, to 360networks Corp.

Proceeds will be used to pay pre- and post-filing obligations.

Touch America also said it has received a commitment for a $5 million debtor-in-possession credit facility from WLR Recovery Fund II, LP, a fund managed by WL Ross & Co. WL Ross is the backer of 360networks.

"Touch America has been struggling to become cash flow positive in this difficult economic environment," said Bob Gannon, chairman and chide executive officer, in a news release. "Based on the continuing uncertainty about our liquidity, the board decided that seeking bankruptcy protection was the best option to deal fairly with our creditors, customers and employees."

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