Winstar Files for Bankruptcy, Blames Lucent
Cash-strapped telecommunications services provider Winstar Communications Inc. said it blamed Lucent Technologies Inc. for violating a vendor financing agreement and forcing it to file for bankruptcy protection. Winstar also filed a $10-billion lawsuit against Lucent, the Murray Hill, N.J.-based telecom giant that has already lent Winstar about $700 million. Winstar, which filed for Chapter 11 bankruptcy protection in Wilmington, Del., said it has arranged for $75 million in loans from a group of banks to maintain operations. The New York-based company had failed to make about $75 million of interest payments. In the lawsuit, Winstar alleged that Lucent breached its obligations under a five-year supply agreement. On Monday, Lucent declared Winstar in default of that agreement. Trading in Winstar shares was halted. The shares had closed Tuesday at 14 cents on Nasdaq, down nearly 99% this year. Lucent closed up 42 cents at $7.57 on the New York Stock Exchange.
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