Broadstripe files for bankruptcy

Officials of Broadstripe, formerly known to cable customers as Millennium Digital Media Systems, have announced the company has filed for bankruptcy.

The company filed for relief in the U.S. Bankruptcy Court for the District of Delaware under Chapter 11 of the U.S. Bankruptcy Code, which will allow the business to restructure its debt.

Broadstripe provides services in Maryland, Michigan, Oregon and Washington.

There are about 40,000 Broadstripe subscribers in Anne Arundel County, making the company the second-most prevalent provider of telecommunications services in the county. Comcast, the market leader, has about 100,000 customers in the county, and Verizon FiOS serves about 6,000.

Most of Broadstripe's phone, Internet and TV customers are concentrated in the northern reaches of the county and the Broadneck Peninsula.

The voluntary petitions for relief were decided on terms between the company and its senior secured lenders and its second lien secured lenders, according to a Broadstripe media release.

"The filing allows the company to operate in the normal fashion under court protection while it reorganizes," officials said in the release.

Gustavo Prilick, Broadstripe's chief executive officer, told The Capital this morning that he believes the decision will enable the company to operate business as usual while continuing to upgrade its networks and introduce new products to its customers.

"I don't like to use the word bankruptcy because what we are doing is capital restructuring, which was inadequate for investing in the three areas we operate," Mr. Prilick said. "This will allow us to significantly enhance the customer experience because we'll be able to allocate the capital we need to increase the speed and enhance the products."

Mr. Prilick added that customers should not experience any changes in their service.

Some of the company's lenders have promised to give Broadstripe up to $15 million in debtor-in-possession financing, according to the release.

This summer, Broadstripe underwent an ownership transfer when a shareholder, Highland Crusaders Offshore Partners, invested more in the company, boosting its investments from 40 percent to about 92 percent ownership.

That ownership transfer occurred just one year after a failed business deal between Millennium and Comcast Cable of Maryland, whose holders wanted to take over Millennium in the summer of 2007. Although the two companies had applied for a transfer of control, Comcast ultimately pulled out of the sale before the end of August 2007.

Mr. Prilick said there isn't any talk of another business transaction with Comcast.

"There have been no discussions with Comcast at this point," he said. "There is always the unsolicited request - that sort of thing - it's part of the industry. But, no, we're not in any discussions."