Bankrupt network gets new ultimatum - from suppliers

Equipment vendors are the latest group to try to shut down KPNQwest's network

Having survived deadlines from the liquidators and the employees at the Ebone network centre in Belgium, bankrupt service provider KPNQwest may finally be taken down by its suppliers, according to a source close to the bankruptcy process. A large supplier of network equipment is understood to have issued a deadline, saying that it will shut the network down unless KPNQwest pays it 15 million euros by the end of Tuesday. To shut down the network, it seems that any supplier owed significant amounts of money would apply to the liquidator, whose statement last Tuesday explicitly gave suppliers this right. "The success of the plan... depends on the willingness of the suppliers," said the liquidators' release last week. "Also for the case (sic) that crucial suppliers are not willing to proceed on such a basis, the liquidators reserve the right to discontinue the execution of the plan with immediate effect." The identity of the supplier is unknown, but KPNQwest owes money to Nortel, Alcatel, Cisco and others. Alcatel, which is owed around 100 million euros, is believed to be behind this ultimatum. Fifteen million euros would represent two weeks licence money owed by KPNQwest to Alcatel, said the source. However, this may just be ritual posturing, of the kind that goes on behind the scenes in any bankruptcy. "There is not enough money to pay them, and they know this," said a source. Shutting the network down would make it less likely that they would see any money from a successful sale of parts of it. A spokesman for the administrators said that a legal order to shut down the network would apply to the Ebone network as well. If the Ebone workers carried out their pledge to continue independently if KPNQwest is turned off, they would be breaking the law. Alcatel did not immediately respond to requests for comment.


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