The revolt at Yipes Communications began at the first mention of the word "bankruptcy," a company insider told The Net Economy this evening.
Although the company has not made any official announcement of management changes, the well-placed source says most top-ranking members of the Yipes team have stepped down, including Jerry Parrick, founder and former CEO, Ron Young, co-founder and chief marketing officer, Kamran Sistanizadeh, co-founder and chief technology officer, and Rob Valdez, chief financial officer.
The company could not be reached for comment on the management changes as of 8 p.m. Eastern time, in part because, according to former spokesman Jonathan Marshall, who left the company earlier in the week, its receptionists had been laid off and there was no one to answer the phones.
Marshall confirmed that Dennis Muse has replaced Parrick as CEO, but says Parrick will remain chairman of the board.
Despite Parricks prediction of a quick escape from bankruptcy, made in an exclusive The Net Economy interview just four days after the company filed for Chapter 11 bankruptcy protection, the fate of the company appears grim.
Muse has come on board as a mortician, not a healer, the source says: "He has been brought in for the last rites."
The board needed little convincing to file for Chapter 11 and reached a decision in less than two days, the insider says.
Apparently, a small group of people at the company was able to convince the Yipes board to make the decision, despite the fact that the companys known financial status did not seem to require bankruptcy protection. The theory was that the company could go in and out of Chapter 11 quickly, without losing customers, but those customers are already leaving, says the insider.
Yipes had no long-term debt and money in the bank, says the source. It did have 20-year fiber-lease and real-estate contracts, but had been renegotiating those deals over the past six months and had made significant progress. Its equipment contracts were small, amounting to about $27 million, which the company could have paid off.
In addition, the company had been very close to acquiring another company, but the deal quickly fell apart once the Chapter 11 discussions began.