Vancouver, Wash.-Time Warner Telecom's letter of intent to buy much of the assets of bankrupt GST Telecommunications Inc. expired last Monday when the two parties were unable to come to an agreement on the terms of the acquisition.
Time Warner Telecom, 48 percent owned by Time Warner Inc., executed the letter the day GST filed for bankruptcy in Delaware. The parties had announced that Time Warner Telecom would pay $450 million for "substantially all" of GST's assets.
GST is a competitive local-exchange carrier and Internet-service provider certified to operate in Arizona, California, Hawaii (where it operates the state's largest Internet dial-up service), Idaho, Nevada, New Mexico, Oregon, Texas and Washington.
The intended deal was immediately challenged, first by a Maui, Hawaii-based ISP, which claimed that it had made an earlier and larger bid for the company. Then AT & T Corp. challenged the deal-making process in court, although it did not signal a bid of its own.
Since GST's intended acquisition deal has fallen through, the bankruptcy court will supervise an auction for the troubled company, which filed for bankruptcy once its debts hit the $1.2 billion mark.
Companies that are still interested in acquiring GST must submit bids by July 31. The auction is scheduled for Aug. 4.
