Las Vegas telecommunications companies seek bankruptcy

By Steve Green (contact)

Monday, June 14, 2010 | 10:23 a.m.

A group of telecommunications companies backed by Las Vegas investor and airline executive Maurice Gallagher Jr. filed for Chapter 11 bankruptcy protection Sunday in order to block AT&T from shutting off services for its network.

The filings were made in Nevada bankruptcy court by Las Vegas-based companies CommPartners Holding Corp., CommPartners Carrier Services Corp., CommPartners Network Services LLC and CommPartners LLC.

In court papers, the companies said they do business under the name CommPartners Connect and that they have 58 employees in Las Vegas as well as 13 employees in other states.

Gallagher resigned as chairman of the company on Friday, along with board member Jeff Hardesty, the bankruptcy filing said.

Gallagher, chairman and CEO of airline owner Allegiant Travel Co., previously founded telecommunications company MGC Communications, later known as Mpower Communications Corp., which was reorganized in bankruptcy.

CommPartners said it's a facilities-based network operator providing voice over Internet protocol services, and other services, to businesses.

"Voice over Internet protocol" is a general term for technologies for delivery of voice communications over Internet protocol networks.

The company posted a 2009 loss of $4.8 million on revenue of $31.3 million and said that as of April 30 it had assets of $8.5 million against liabilities of $6.3 million.

The company said it has faced competitive challenges as well as regulatory issues and lawsuits involving disputed charges; and that AT&T had given the company until Monday to pay a disputed balance of $1.35 million or AT&T would suspend new orders and customer service activities for CommPartners.

AT&T also threatened to later this month shut down the CommPartners network in California, CommPartners said in court papers.

"Taken as a whole, the increased level of litigation and the associated increase in legal activities, fees and potential liabilities (not to mention resource distraction for management) place the company in a position of needing immediate court protection despite the fact that the core `Hosted Services' business of the company continues to grow," CommPartners said in its filing.