Visions Of Life
2004-05-13 15:49:01 (UTC)

Communications provider bankrupt again

May 11, 2004

SUMMIT COUNTY - A Breckenridge-based telecommunications
company contracted to connect county departments,
nonprofits and related agencies to the state's fiber optic
backbone filed for bankruptcy last week, leaving company
insiders and county officials wondering where millions of
dollars disappeared to.

If the Peak Speed Communications bankruptcy proceeds, it
could mean the county government is the new owner of a
wireless telecommunications network.

Peak Speed filed for Chapter 11 bankruptcy protection with
the United States Bankruptcy Court in Denver on May 3,
following that filing with documents indicating the
company's top 20 creditors are owed more than $1.2 million.

Peak Speed merged with the former Netbeam
telecommunications company - a company run out of the same
Airport Road offices and founded by the same people - in
December, following the bankruptcy court judge's approval
of Netbeam's bankruptcy organization plan.

The former president, chief executive officer and chairman
of Peak Speed Communications board, Robert Bowen, helped
salvage Netbeam with capital investment at the last hour of
Netbeam's bankruptcy proceedings.

Bowen's Aurora company, Rock Solid Broadband, invested
$250,000 in Netbeam/Peak Speed in return for a 30 percent
stake in the merged companies.

Two more investors, one of whom also took a seat on the
board of directors with Bowen, helped Peak Speed secure and
increase its line of credit with First United Bank of
Englewood, to the tune of $585,000.

In addition, Summit County, via the Summit County
Telecommunications Consortium, awarded Peak Speed a
$456,000 contract to build a wireless network to connect
government agencies and local nonprofits to the state's
high-speed fiber optic network.

The money for the project comes from the state's Department
of Local Affairs' Beanpole Project.

Bowen said Tuesday that, despite the bankruptcy court's
order that Netbeam and Peak Speed founders Greg Friedman
and Judith Mercer-Friedman not be allowed to control the
company or oversee its accounting, he was unable to keep
the Friedmans from taking control of the company.

Bowen also said that, as soon as he took the helm of Peak
Speed, he learned contractors hired for the Beanpole work
weren't getting paid - at the same time the Friedmans were
asking him for money because of Beanpole Project overruns.

"Where's all the money? One of the people asking that is
me," Bowen said. "After the payouts according to the
(bankruptcy organization) plan, there was about $70,000
left. Most of that went to covering Peak Speed's operating
deficits. All of the money from the plan was gone in about
40 days."

The Beanpole Project has been substantially completed,
although well past the original deadline.

According to the county information systems manager, Byron
Rice, county government offices, town government offices
and nonprofits such as The Summit Foundation have been
connected to the state's fiber optic backbone, referred to
as the Multi-Use Network or MNT, and are up and running.

"As far as we're concerned, we're happy customers here,"
Rice said.

Before the county awarded the Beanpole contract to Peak
Speed, county attorneys inserted a protective clause in the
event Peak Speed filed for bankruptcy.

County officials learned that Peak Speed was essentially
the same company as Netbeam and knew of Netbeam's financial

County attorney Dan Teodoru said the county took extra
precautions in entering into the agreement, far above what
is done for normal contracts. As per the Beanpole contract,
ownership of the equipment - six towers and transmission
equipment located throughout the county - reverts to the
county in the event of bankruptcy.

Teodoru and assistant county manager Sue Boyd said Tuesday
they will wait to learn more about Peak Speed's current
situation before responding.

Friedman could not be reached Tuesday for comment.

Summit County Telecommunications Consortium chairman and
Frisco Mayor Bernie Zurbriggen, a former Netbeam investor,
would not comment Tuesday.

County Commissioner Gary Lindstrom, one of the few county
officials who voiced serious reservations in deliberations
over Peak Speed and the Beanpole Project, said Friedman
gave no indication of any problems at the consortuim's
meeting last week.

"I find it very disturbing, after all the assurances we
received publicly and privately," Lindstrom said. "It's
very distressing."