e.spire agrees to sell internet subsidiary; asks bankruptcy court to expedite sale - Business - to chairman George F. Schmitt - Brief Article

ISP Business, Dec, 2001

e.spire Communications Inc. announced that it has signed an agreement to sell its Florida-based Internet subsidiary, CyberGate Inc., to e.spire chairman George F. Schmitt. To accomplish the sale, it has filed a motion with the US Bankruptcy Court for the District of Delaware requesting expedited approval of sale procedures, which include a procedure for the submission of competitive bids and the scheduling of an auction and a hearing to consider approval of the sale.

"e.spire wants to sell CyberGate and I have decided to buy it because I think it is a valuable asset and an excellent investment," said Schmitt.

e.spire's board of directors recommended approval of the deal, which will add up to $15.5 million in cash to e.spire's cash reserves. This additional cash will be important as negotiations of exit financing continue and a business plan is finalized for emergence from Chapter 11 bankruptcy protection, for which the company voluntarily filed on March 22 of this year.

"George will continue to run e.spire," said Bradley H. Sparks, e.spire's chief financial officer. "Tomas V. Mikaelsson will remain as president of CyberGate and continue to manage day-to-day operations. No major operational changes are planned at this time."