Thursday, December 22, 2011

Open Range to Auction $100 Million of Assets on January 11 & 12 via Webcast

StimulatingBroadband.com 12/22/2011 San Francisco -  Two asset recovery firms retained by Open Range Communications, Inc. -- Heritage Global Partners and Counsel RB Capital Inc. -- will conduct a  webcast auction of surplus assets held by the bankrupt wireless broadband provider.

No, not these guys, but Open Range Communications, Inc.
did finally get a new sheriff in town.

According to this morning’s press release on Business Wire, the webcast “auction will be held on Wednesday, January 11 and Thursday, January 12, from 10 am MST, through 5 pm MST at www.hgpauction.com and in person at the company’s headquarters in Greenwood Village, CO.”

Open Range, which had been rolling out a WiMAX network using wireless broadband equipment from Alvarion Ltd. (NasdaqGS: ALVR), in 2008 secured a $267 million Broadband Program Loan issued by the Rural Utilities Service of the U.S. Department of Agriculture (RUS). 

The failed loan, from the Farm Bill Broadband Loan Program, was awarded in the last months of the administration of former president George W. Bush. It is the largest single loan awarded by USDA for the support of rural telecom infrastructure in the history of any such federal programs since their inception in 1949.

The auction, which was recently approved by the federal bankruptcy judge hearing the case, “will feature large quantities of state-of-the-art networking, test equipment, IT equipment and office furnishings as well as more than 350 cell towers located throughout the United States,” according to this morning's release. Previous action by the Court had directed a liquidation of the firm's assets that resulted in a paltry $2 million "stalking horse" bid response by the small Minnesota-based wireless Internet service provider (WISP) called TotheHome.com.


“This auction is an opportunity for local or regional wireless telecom providers to purchase technologies and equipment to expand their services and better serve their customers,” said David Weiss, VP of Heritage Global Partners. “We are pleased to represent Open Range, and leverage our global webcast platform and vast experience in selling assets around the world, concluded Mr. Weiss” 


Open Range filed for Chapter 11 federal bankruptcy protection on October 6 after over a year of watchful waiting by the industry, officials at RUS, and company subscribers in rural areas of the country.

As first reported by this publication on September 15 of last year, Open Range's ability to operate across its proposed 17-state footprint was put at high risk as the Federal Communications Commission ruled against the provider's spectrum lease with satellite carrier Globalstar, Inc. (NasdaqGS: GSAT). RUS restructured a reduced loan package earlier this year.


Heritage Global Partners is led by Ross and Kirk Dove. The firm supports large and small companies with buying and selling of assets. 


Offices of Open Range Communications, where the on-site portion of the auction will be held, are located at 6430 S Fiddlers Green Circle #500, Greenwood Village, Colorado.


Additional information is available at: www.hgpauction.com.  

Our Take: Congress Needs to Answer Two Questions 
We hope that the current investigation by Congress into what happened at Open Range, going back to the Bush Administration, doesn't descend into partisan bickering like virtually everything else in Washington. 

Open Range needed a new sheriff in town from the day the one single $267 million loan package was issued. We think the initial loan itself, at an absurdly ambitious funded level, was the first mistake. Congress needs to ask the tough questions as to why a large, single, and risky loan ever was approved.

We think that RUS under the current Administration tried to be the new sheriff in town.  Why the provider went bankrupt after the renegotiated smaller loan package was issued is the second key question. It is one that needs to be understood by any of us that would presume to know anything about how rural broadband will be implemented in our country.

Open Range finally got its new sheriff, in the person of a federal bankruptcy judge. Like the law arriving after a bloody range war, it was too little too late. StimulatingBroadband.com
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