BERMUDA, April 12 -- FLAG Telecom announced today that it has filed for bankrupcty under Chapter 11 with the US Bankruptcy Court for the Southern District of New York. Certain subsidiaries of the company have also filed voluntary petitions under Chapter 11.
This action was taken after the board of directors authorized the filing of the petition by unanimous vote. The board's action was taken following the acceleration of the bank debt of FLAG Atlantic Ltd. by the syndicate of banks which are its lenders, which constituted a cross-default under the company's indenture for its outstanding senior notes.
As announced yesterday, the board has authorized FLAG Telecom's management and advisors to negotiate with certain creditors, including representatives of the FLAG Telecom Atlantic Bank Group, holders of its various senior notes, and significant trade creditors, regarding a comprehensive financial restructuring.