Just days after we learned that YadaYada was immediately ceasing their operations, OmniSky today annouced that they are filing Chapter 11 and selling their business to Earthlink.
As part of the transaction, OmniSky and EarthLink intend to transition OmniSky's subscribers to EarthLink with the intention of continuing uninterrupted wireless service to those subscribers.
To effect the transaction, OmniSky also announced that it intends to voluntarily file for protection under Chapter 11.
The closing of the transaction is subject to customary closing conditions, including approval of the bankruptcy court and a bankruptcy court-supervised overbidding process, where bidders with higher and better offers may emerge.
The Chapter 11 filing is expected to enable OmniSky to maintain its operations and continue to provide wireless service to its subscribers during the sale approval and transition process.
"This filing is intended to protect and maximize the value of our business for the benefit of all of our stakeholders and to preserve uninterrupted service for our subscribers until they can be transitioned to EarthLink," said Patrick McVeigh, OmniSky's Chairman and Chief Executive Officer.
While the bankruptcy court reviews the proposed sale to EarthLink and other offers that may emerge, OmniSky believes that it has sufficient cash on hand to finance its operations, including supporting the company's post-petition trade and employee obligations, as well as its ongoing operating needs during the process.
The following e-mail is being sent to OmniSky's customers:
"Dear Valued OmniSky Customer, Today we announced that OmniSky has agreed to sell its subscriber base and key technology assets to Atlanta-based EarthLink, a leading Internet service provider. We are very excited about the prospects of this agreement and what it means for you.
This acquisition leverages EarthLink's position as a world-class provider of Internet access -- from dial-up and DSL/high speed access, to wireless Internet access. As an award-winning company that focuses on providing its subscribers with the best Internet experience possible -- wherever they are, through whatever device they are using -- EarthLink will continue to improve and expand upon your existing OmniSky service.
You can look forward to satisfying your need for new features, enhanced functionality, and additional device options in the coming months, all from one company. We expect to continue to provide you with uninterrupted, high quality service and support.
We anticipate that our day-to-day business will, in the short term, continue as usual.
We do not expect: - Your service to be interrupted - Your email address to change - Your pricing to change
- Our customer support to change
To ensure the most seamless transition for our customers, the company has filed for Chapter 11 protection. Our agreement with EarthLink is subject to a number of customary closing conditions, including the receipt of bankruptcy court approval. We hope to obtain that approval in January 2002, although we cannot be certain as to that timing. It was OmniSky's priority to ensure that our customers were in good hands. Your care is EarthLink's priority.
Please look forward to hearing directly from EarthLink in the coming weeks.
They will be providing more information on the transition and associated customer benefits. In the meantime, for more information and the latest updates, please visit http://www.omnisky.com/earthlink