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  • Metromedia Fiber Defaults, Names New CEO
Apr 2002
NEW YORK, April 2 -- Metromedia Fiber Network said it has defaulted on several notes and is in talks with debt holders about a possible restructuring. The company also named John W. Gerdelman as its new president and chief executive and Robert F. Doherty as executive vice president, finance and administration. Gerdelman replaces former President and CEO Mark Spagnolo, while Doherty succeeds former CFO Randall Lay. Both Spagnolo and Lay resigned to pursue other interests, Metromedia said.

Metromedia defaulted on its $231 million, 14-percent term notes due 2007. The notes were originally issued to Nortel Networks Corp. The company couldn't make its $8.1 million interest payment on the Nortel debt and at the same time satisfy its other near-term cash requirements. The Nortel situation triggered a cross-default on Metromedia's $150 million floating rate guaranteed term notes due 2006, issued to a group of holders led by Citicorp USA.

Metromedia also defaulted on its $62.5 million, 8.5-percent senior subordinated convertible notes due 2003 issued to Bechtel Corp., its $50 million, 8.5-percent senior secured convertible notes issued to Verizon Communications, its $180 million, 8.5-percent senior convertible notes due 2011 and some of its promissory notes.

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