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GENERAL QUESTIONS
Q What does filing a petition for Chapter 11 mean?
A A petition for Chapter 11 means the Company asks a court for protection while liabilities are negotiated and reorganized. In restructuring, the court recognizes the Company is worth more if it continues to operate than if it were shut down and liquidated its assets to pay creditors. Also, current management can remain in charge of the firm.
Q Does filing for Chapter 11 mean the Company is going out of business?
A No. This is a tactical and temporary measure to restructure the Company’s debts and other liabilities so that it has the opportunity to survive and ultimately grow and prosper.
Q Why did the Company file for Chapter 11? Was this the only course?
A Over the last nearly two years, under new leadership, the Company has investigated numerous solutions to this problem, including selling the company, partnering, mergers and acquisitions, and incurring further debt to support growth. These options provided no remedy to the needs of the company. Meanwhile, current management had been cautious before engaging in restructuring under Chapter 11 as it wanted a clear path for re-emerging. Now, given the support and the ongoing interest of the senior investors, it has become apparent that restructuring under Chapter 11 is the healthiest and most responsible solution.
Q How will the Company be run during the Chapter 11 proceeding?
A The Company will run as usual; day-to-day operations will not be affected. The additional new financing the Company will receive as part of the reorganization will ensure that the Company can operate during the restructuring.
Q Will there be layoffs?
A There are no layoffs planned.
Q Will there be pay cuts?
A No. Employee compensation, vacations, performance bonuses, etc. will remain identical to guidelines before restructuring. All will be honored as before.
Q How will this affect employee benefits?
A Employee benefits will not change.
Q How will the Company communicate during the re-structuring?
A The Company will have several means for communicating with the public during the re-structuring process including a series of publicized webcasts by the CEO, a micro-site for customers and interested parties, occasional press releases updating our customers and suppliers as to our status, as well as ongoing information added to our website.
Q What will happen to my common stock?
A At this time, nothing has been determined regarding your common stock. As the case progresses, record holders of common stock will be given notice of any action proposed by the Debtor that would directly impact holders of common stock.
Q & A FOR SUPPLIERS
We would like to put to rest immediately any concerns that critical suppliers have about being paid. We would like to stress these important points:
- the reorganization relates to the re-structuring of legacy corporate financial matters and has no negative impact on our current operations.
- it is going to be business as usual for GigaBeam and that means we will ship product, provide service and pay suppliers and service providers that are deemed necessary for the ongoing operations of our business.
Q What should suppliers know about the Company filing Chapter 11?
A The Company has sought the protection of the court system to restructure its debt, equity and liabilities. We will continue to operate. On a case by case basis, contributors to the business (as deemed by management and with approval of the court) will continue to engage with the company and be paid for this engagement.
Questions must be directed to the Company’s communication committee, including: Shane Barton, Marijke McCandless or Jay Lawrence by sending an email to restructuring@gigabeam.com Answers to select questions will be posted as part of the webcast series.
Q So what about the material you’ve already ordered but that we haven’t shipped? How will I be paid for what you’re ordering today?
A The court will approve and permit the company to purchase and pay for materials and services deemed necessary to operate the business successfully. If you have any further questions, please contact us at restructuring@gigabeam.com. We will endeavor to answer your question publicly in the next webcast.
Q If you filed Chapter 11, what are you using for money?
A The Company has been paying for its operations out of revenue cash flow for nearly two years. Additionally, we have a commitment for Debtor-in-Possession financing that will provide additional operating and working capital so that we can ensure successful emergence from re-structuring.
Q Are you closing down your operations?
A No.
Q . . . Will I get paid?
A In the bankrupty process, creditors owed amounts for claims incurred prior to the bankruptcy filing can submit a proof of claim for the amount owed to them. These forms are available on the Banruptcy Court's website at http://www.deb.uscourts.gov/. Select the link for the "Forms" page and select the link for the "Claim form". Once all claims are submitted, the Bankruptcy Court conducts an orderly claims reconciliation process, during which claims are evaluated and reconciled. Depending upon the funds available in the bankruptcy estate after all claims are reconciled. Depending may or may not receive a distribution for their claims. We are very early in the bankruptcy process, and we are unable to predict the distribution that will be made to general unsecured creditors.
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