UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) January 24, 2005
ATX COMMUNICATIONS, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 000-49899 13-4078506
(State or Other Jurisdiction (Commission (IRS Employer
Of Incorporation) File Number) Identification No.)
2100 Renaissance Boulevard, King of Prussia, PA 19406
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(Address of principal executive offices) (Zip Code)
(610) 755-4000
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(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
SECTION 1 - REGISTRANT'S BUSINESS AND OPERATIONS
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On January 24, 2005, CoreComm Illinois, Inc., CoreComm Indiana, Inc.,
CoreComm Michigan, Inc., CoreComm Newco, Inc., and CoreComm Wisconsin, Inc.
(collectively, the "CoreComm Midwest CLECs"), and certain of their respective
parents (including, without limitation, ATX Communications, Inc. (the
"Company")), affiliates and subsidiaries (collectively and together with the
CoreComm Midwest CLECs, "CoreComm"), SBC Communications Inc., SBC
Telecommunications, LLC (f/k/a SBC Telecommunications, Inc.), as agent for
Illinois Bell Telephone Company, d/b/a SBC Illinois, Indiana Bell Telephone
Company Incorporated, d/b/a SBC Indiana, Michigan Bell Telephone Company, d/b/a
SBC Michigan, The Ohio Bell Telephone Company, d/b/a SBC Ohio, and Wisconsin
Bell, Inc., d/b/a SBC Wisconsin (collectively, the "SBC Midwest ILECs") and
Leucadia National Corporation ("Leucadia"), in its capacity as a secured and
unsecured creditor of CoreComm, entered into a Comprehensive Settlement
Agreement (the "SBC Settlement Agreement") providing for the compromise and
settlement, except as otherwise expressly set forth in the SBC Settlement
Agreement, of any and all litigation and all other claims among such parties
arising prior to the date of the SBC Settlement Agreement, all pursuant to the
terms and subject to the conditions set forth in the SBC Settlement Agreement.
In addition to the settlement of such litigation and claims, the SBC Settlement
Agreement provides for, among other things, the disposition by the CoreComm
Midwest CLECs of certain assets used in connection with their provision of
competitive local exchange services to end-user customers in Indiana, Illinois,
Michigan, Ohio and Wisconsin (collectively, the "Midwest States"). The
consummation of the transactions contemplated by the SBC Settlement Agreement
are subject to the approval of the U.S. Bankruptcy Court for the Southern
District of New York (the "Bankruptcy Court").
The SBC Midwest ILECs operate incumbent local exchange carriers (within
the meaning of 47 U.S.C. Section 251(h)) that provide unbundled network elements
and other telecommunications facilities and services to certain local exchange
carriers (within the meaning of 47 U.S.C. Section 3(26)) in the Midwest States.
The SBC Midwest ILECs provide such facilities and services to the CoreComm
Midwest CLECs pursuant to certain Wholesale Agreements and Retail Agreements, as
well as a stipulation by and among CoreComm and the SBC Midwest ILECs entered
into on or about March 31, 2004. Prior to January 15, 2004 (the "Petition
Date"), the date on which the Company and its subsidiaries commenced their
Chapter 11 cases in the Bankruptcy Court, the CoreComm Midwest CLECs and the SBC
Midwest ILECs were engaged in litigation that has been stayed as a result of the
Chapter 11 cases. Prior to the Petition Date, Leucadia purchased certain claims
against CoreComm, which Leucadia contends are secured by all or substantially
all of CoreComm's assets. In addition, Leucadia has provided a $5,000,000 debtor
in possession financing facility that, subject to certain conditions, is secured
by all or substantially all of CoreComm's assets.
On January 25, 2005, the Company, certain of its subsidiaries (including,
without limitation, CoreComm Maryland, Inc.) (collectively, "ATX"), Leucadia, in
its capacity as a secured and unsecured creditor of ATX, and Verizon
Communications Inc. and certain of its wholly owned subsidiaries (collectively,
"Verizon") entered into a Comprehensive Settlement
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Agreement (the "Verizon Settlement Agreement") providing for the compromise and
settlement, except as otherwise expressly set forth in the Verizon Settlement
Agreement, of any and all litigation and all other claims among such parties
arising prior to the date of the Verizon Settlement Agreement, all pursuant to
the terms and subject to the conditions set forth in the Verizon Settlement
Agreement. In addition to the settlement of such litigation and claims, the
Verizon Settlement Agreement provides for, among other things, the assumption or
termination by ATX of certain interconnection agreements and other contracts and
arrangements provided under tariffs (the "Verizon Agreements") pursuant to which
Verizon provides and/or furnishes certain services and facilities to or for the
benefit of ATX. The consummation of the transactions contemplated by the Verizon
Settlement Agreement are subject to the approval of the Bankruptcy Court.
Verizon provides services to ATX pursuant to the Verizon Agreements. Prior
to the Petition Date, ATX and Verizon were engaged in litigation that has been
stayed as a result of the Chapter 11 cases. On July 19, 2004, the Bankruptcy
Court approved a stipulation and order pursuant to which ATX (i) is required to
prepay Verizon for its services provided during the pendency of the Chapter 11
cases (subject to periodic reconciliations of such prepaid amounts to those
amounts actually billed), and (ii) with Leucadia's consent, granted to Verizon a
first priority security interest in and a lien on all receivables (including the
products and proceeds thereof) derived from or relating to the services provided
under the Verizon Agreements to secure such payment by ATX.
SECTION 8 - OTHER EVENTS
ITEM 8.01 OTHER EVENTS.
On January 24, 2005, the Company and its subsidiaries filed their proposed
First Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy
Code (the "Plan") and related disclosure statement (the "Disclosure Statement")
with the Bankruptcy Court.
Bankruptcy law does not permit solicitation of acceptances of the proposed
Plan until the Bankruptcy Court approves a disclosure statement (which may or
may not be in the form of the Disclosure Statement) relating to the proposed
Plan. Accordingly, this Current Report on Form 8-K is not intended to be, nor
should it be construed as, a solicitation for a vote on the proposed Plan.
In accordance with general instruction B.6 of Form 8-K, this report will
not be deemed an admission as to the materiality of any information herein that
is required to be disclosed solely by Regulation FD.
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SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(c) EXHIBITS.
EXHIBIT NO. DESCRIPTION
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2.1 Debtors' First Amended Joint Plan of Reorganization Under
Chapter 11 of the Bankruptcy Code, dated as of January 24,
2005
2.2 Disclosure Statement for Debtors' First Amended Joint Plan of
Reorganization Under Chapter 11 of the Bankruptcy Code, dated
as of January 24, 2005
10.1 Comprehensive Settlement Agreement, dated as of January 24,
2005, by and between CoreComm Illinois, Inc., CoreComm
Indiana, Inc., CoreComm Michigan, Inc., CoreComm Newco, Inc.,
and CoreComm Wisconsin, Inc., and each of their respective
parents, affiliates and subsidiaries that are signatories
thereto, SBC Communications Inc., SBC Telecommunications, LLC
(f/k/a SBC Telecommunications, Inc.), as agent for Illinois
Bell Telephone Company, d/b/a SBC Illinois, Indiana Bell
Telephone Company Incorporated, d/b/a SBC Indiana, Michigan
Bell Telephone Company, d/b/a SBC Michigan, The Ohio Bell
Telephone Company, d/b/a SBC Ohio, and Wisconsin Bell, Inc.,
d/b/a SBC Wisconsin and Leucadia National Corporation.
10.2 Comprehensive Settlement Agreement, dated as of January 25,
2005, by and among ATX Communications, Inc. and each of its
subsidiaries identified in Attachment 1 thereto, CoreComm
Maryland, Inc., Leucadia National Corporation, Verizon
Communications, Inc., GTEW Midwest Incorporated, GTE Southwest
Incorporated, Verizon California Inc., Verizon Delaware Inc.,
Verizon Florida Inc., Verizon Hawaii Inc., Verizon Maryland
Inc., Verizon New England Inc., Verizon New Jersey Inc.,
Verizon New York Inc., Verizon North Inc., Verizon Northwest
Inc., Verizon Pennsylvania Inc., Verizon South Inc., Verizon
Virginia Inc., Verizon Washington, DC Inc., Verizon West
Virginia Inc., Verizon Services Corp. and Telesector Resources
Group, Inc. (d/b/a Verizon Services Group).
99.1 Press Release of the Company, dated January 25, 2004
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Cautionary Statement Regarding Forward Looking Statements
This document contains certain forward-looking statements that involve
substantial risks and uncertainties. All statements regarding the Company's
expected future financial position, results of operations, cash flows,
restructuring and financing plans, business strategy, budgets, projected costs,
capital expenditures, competitive positions, growth opportunities, plans and
objectives of management for future operations and statements that include words
such as "anticipate," "if," "believe," "plan," "estimate," "expect," "intend,"
"may," "could," "should," "will," and other similar expressions are
forward-looking statements. Such forward-looking statements are inherently
uncertain, and readers must recognize that actual results may differ from the
Company's expectations.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: January 28, 2005 ATX COMMUNICATIONS, INC.
(Registrant)
By: /s/ Neil Peritz
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Name: Neil Peritz
Title: Chief Accounting Officer
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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2.1 Debtors' First Amended Joint Plan of Reorganization Under
Chapter 11 of the Bankruptcy Code, dated as of January 24,
2005
2.2 Disclosure Statement for Debtors' First Amended Joint Plan of
Reorganization Under Chapter 11 of the Bankruptcy Code, dated
as of January 24, 2005
10.1 Comprehensive Settlement Agreement, dated as of January 24,
2005, by and between CoreComm Illinois, Inc., CoreComm
Indiana, Inc., CoreComm Michigan, Inc., CoreComm Newco, Inc.,
and CoreComm Wisconsin, Inc., and each of their respective
parents, affiliates and subsidiaries that are signatories
thereto, SBC Communications Inc., SBC Telecommunications, LLC
(f/k/a SBC Telecommunications, Inc.), as agent for Illinois
Bell Telephone Company, d/b/a SBC Illinois, Indiana Bell
Telephone Company Incorporated, d/b/a SBC Indiana, Michigan
Bell Telephone Company, d/b/a SBC Michigan, The Ohio Bell
Telephone Company, d/b/a SBC Ohio, and Wisconsin Bell, Inc.,
d/b/a SBC Wisconsin and Leucadia National Corporation.
10.2 Comprehensive Settlement Agreement, dated as of January 25,
2005, by and among ATX Communications, Inc. and each of its
subsidiaries identified in Attachment 1 thereto, CoreComm
Maryland, Inc., Leucadia National Corporation, Verizon
Communications, Inc., GTEW Midwest Incorporated, GTE Southwest
Incorporated, Verizon California Inc., Verizon Delaware Inc.,
Verizon Florida Inc., Verizon Hawaii Inc., Verizon Maryland
Inc., Verizon New England Inc., Verizon New Jersey Inc.,
Verizon New York Inc., Verizon North Inc., Verizon Northwest
Inc., Verizon Pennsylvania Inc., Verizon South Inc., Verizon
Virginia Inc., Verizon Washington, DC Inc., Verizon West
Virginia Inc., Verizon Services Corp. and Telesector Resources
Group, Inc. (d/b/a Verizon Services Group).
99.1 Press Release of the Company, dated January 25, 2004