Excite@Home said Wednesday that AT&T removed four executives from the troubled high-speed Internet service provider's board of directors and relinquished its rights to replace them.
An AT&T representative said Wednesday that the board members were removed to avoid a conflict of interest since the telecom company is bidding for Excite@Home's assets.
The AT&T executives who left the board effective Oct. 1 are Chief Executive C. Michael Armstrong; Frank Ianna, president of AT&T network services; Chief Financial Officer Charles H. Noski; and Daniel E. Somers, who was replaced as CEO of AT&T Broadband on Tuesday by William Schleyer, a former Media One executive.
With the departure of the four executives, Excite@Home said AT&T would no longer constitute a majority of the board. However, AT&T executives Mufit Cinali and John C. Petrillo will remain on Excite@Home's board.
Excite@Home said the move should not affect the pending sale of assets between the high-speed ISP and AT&T. The board of directors at Excite@Home has been wrangling over AT&T's $307 million offering price for Excite@Home's assets.
Indeed, shareholders and bondholders are peeved about the AT&T bid.
There was also a financial motive for AT&T to remove the board members. The move also allows AT&T to separate Excite@Home's results from its own and record the high-speed ISP's losses as an investment loss. In recent quarters, AT&T's earnings have included the operating results of Excite@Home.
Removing Excite@Home's results from AT&T's is no small matter. On Tuesday, AT&T reported a profit of 4 cents a share, in line with First Call estimates, but well below levels a year ago. AT&T, which has been hampered by a decline in long-distance revenue, said sales were $13.1 billion, down 7.7 percent from a year ago.
During the quarter, Excite@Home recorded charges of nearly $400 million, which primarily consisted of asset impairment charges.
In related news, Excite@Home said Tuesday that it will now trade on the OTC Bulletin Board under the ticker "ATHMQ." Shares of Excite@Home were delisted Monday.
The future of Excite@Home, which is controlled by AT&T, had been uncertain following the deterioration of its media business, a series of earnings misses and funding problems that got it in a sticky situation with lenders.
The company filed
for bankruptcy Oct. 1, in a move CEO Patti Hart said was to "protect the value of the broadband business." But the company has yet to hear any other bids
for its assets.