June 9, 2004 — (WEB HOST INDUSTRY REVIEW) — Allegiance Telecom (algx.com), a national local exchange carrier, said on Tuesday that Judge Robert Drain of the US bankruptcy court for the southern district of New York has approved its reorganization plan, submitted in March.
The reorganization plan is key part of Allegiance Telecom’s efforts to emerge from bankruptcy protection as a part of data and voice carrier XO Communications (xo.com). Saddled with one billion dollars of debt, Allegiance Telecom filed for chapter 11 bankruptcy protection last May.
Earlier this year, XO Communications was selected as the winning bidder for substantially all of the assets of Allegiance Telecom and its subsidiaries, agreeing to pay $311 million in cash and 45.38 million shares in XO common stock. The bid was approved by the court on February 19, 2004, and is currently undergoing certain federal and state government approvals. XO is running Allegiance Telecom under the terms of an operating agreement until final closing, expected to occur on or about June 22, 2004.
