Exodus Communications filed for Chapter-11 reorganization today and has secured $200 million in debtor-in- possession financing from GE Capital.
The money will go to fund post-petition operating expenses and supplier and employee obligations, the company said in a statement. The move was has been widely expected. Several industry experts said a voluntary bankruptcy reorganization was needed because Exodus had lost its new customer acquisition momentum.
William Krause, a successor of Ellen Hancock who resigned this month as the companys long-time chief executive, said the move would help the company focus on long term growth. Observers consensus however is that Exodus will either lose its current top spot as the leading Web hoster on a revenue basis, or get acquired. Likely candidates are either companys largest shareholder Global Crossing, or a large consultancy like EDS.
