American Telephone & Data to Cancel 16 Million Shares

American Telephone & Data Inc. reported that it has completed a program to cancel 16 million shares of restricted stock issued in connection with its acquisition of two wholly owned subsidiaries in 1993.

The Newport Beach holding company said the action was being taken to clean up the company’s balance sheet in preparation for being listed on the American Stock Exchange. The cancellation would have no direct effect on the 7.3 million remaining outstanding shares that are traded over the counter, the company said.

The canceled stock was issued in exchange for the acquisition of CPH-Telemanagement Inc. and FedFax Inc., both of Newport Beach. These were restricted shares tied directly to the subsidiaries.

American said that it is allowed to cancel the stock under the laws of Delaware, where the company is incorporated. The statutes provide for such cancellation of stock because it was ultimately determined that neither of the two acquired subsidiaries had any value.

CPH has filed a voluntary petition for a Chapter 7 liquidation in U.S. Bankruptcy Court in Santa Ana, and FedFax, which has no assets, is being dissolved, the company said.

American currently has two active subsidiaries, TW Communications Inc., a reseller of telephone services, and SelecTel Corp., a telecommunications facilities management company.