Rhythms NetConnections Inc. (Former
NASDAQ
The Nasdaq Stock Market () (National Association of Securities Dealers Automated Quotations Stock Market) is an American stock exchange based in New York City. It is the most active stock trading venue in the US by volume, and ranked second ...
: RTHM) was in the business of providing
broadband local-access
communication services to large enterprises, telecommunications carriers and their
internet service provider (ISP) affiliates and other ISPs. The company's services included a range of high-speed, always-on connections that were designed to offer customers both cost and performance advantages when accessing the Internet or private networks. The Company used multiple digital subscriber line (DSL) technologies to provide data transfer rates ranging from 128 kbit/s to 8.0 Mbit/s delivering data to the end user, and from 128 kbit/s to 1.5 Mbit/s receiving data from the end user. The company was delisted from
NASDAQ
The Nasdaq Stock Market () (National Association of Securities Dealers Automated Quotations Stock Market) is an American stock exchange based in New York City. It is the most active stock trading venue in the US by volume, and ranked second ...
in May 2001. On August 2, 2001, the company and all of its wholly owned United States subsidiaries voluntarily filed for reorganization under
Chapter 11 of the United States Bankruptcy Code. Also in August 2001, the Company sent 31-day service termination letters to all of its customers.
Legal Action
A protracted class action securities lawsuit against the officers and directors of Rhythms NetConnections was settled on April 3, 2009. Judge John K. Lane of the U.S. District Court for the District of Colorado gave his final approval to a $17.5 million settlement. Judge Lane also awarded the plaintiffs' attorneys, Milberg LLP, Stull Stull & Brody and The Shuman Law Firm, 30% of the settlement fund and an additional $2.6 million in expenses from the fund.
A class of shareholders, who purchased shares in Rhythms NetConnections between Jan. 6, 2000, and April 2, 2001, brought the case. The lawsuit alleged that the officers and directors “knowingly or recklessly” made false statements about the company's subscriber line count, growth and financial condition in an effort to inflate its stock price.
At one time,
Enron owned 5.4 million shares of Rhythms NetConnections stock.
[McLean & Elkind, ''The Smartest Guys in the Room'' p191]
See also
*
Covad Communications
*
Dot-com bubble
*
NorthPoint Communications
NorthPoint Communications Group, Inc. was a competitive local exchange carrier focused on data transmission via digital subscriber lines. The company had relationships with Microsoft, Tandy Corporation, Intel, Verio, Cable & Wireless, Frontier C ...
References
Summary of Class Action Suit
External links
*Former Official site - www.rhythms.net
InternetNews.com article - Rhythms NetConnections to End ServiceThe Register - Fattest Fat Cats Ever? - Article on Bonus Payouts to CEO and COO that occurred 3 days prior to bankruptcy
Verizon Communications
Defunct networking companies
Companies disestablished in 2001