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Cisco's court rival files for bankruptcy

A Louisiana phone company, which recently sued Cisco Systems for allegedly selling faulty equipment, has filed for bankruptcy protection.

    A Louisiana phone company, which recently sued Cisco Systems for allegedly selling faulty equipment, has filed for bankruptcy protection.

    American Metrocomm (AMC), a Louisiana phone company that offers high-speed Internet and phone connections to small businesses, will continue to operate while it financially reorganizes. Under its Chapter 11 bankruptcy filing, AMC is protected from its creditors during the restructuring.

    The bankruptcy is the latest twist for AMC, which is mired in a court battle with Cisco.

    In late April, the networking giant filed a lawsuit demanding payment for loans it gave to AMC so it could buy Cisco equipment. AMC responded in May with a countersuit, arguing that it was forced to refund about $1.4 million to its customers because allegedly defective Cisco equipment failed to provide promised services.

    AMC's suit also accuses Cisco employees of alleged conflicts of interest. AMC is seeking $62 million in damages and costs associated with the Cisco equipment. Cisco has vehemently denied the charges levied by AMC, pointing to its track record with other customers.

    AMC executives could not be reached for comment today, but the company said in a statement that it will continue to pursue its suit against Cisco while it financially reorganizes. AMC said in a statement that it has more than 1,000 customers in Louisiana and Mississippi and will continue with plans to expand its service to seven other states in the southeastern United States.