ASHBURN, Va. — Internet communications provider PSINet Inc. filed for protection from creditors under Chapter 11 of the federal bankruptcy laws, citing liabilities that were nearly double its assets.
PSINet had said in April that it was likely to file for bankruptcy because of a cash shortage.
The company said Friday that the filings in U.S. Bankruptcy Court in New York covered itself and 24 of its operating subsidiaries in the United States. It said four Canadian subsidiaries filed for protection in the Ontario Superior Court of Justice.
PSINet’s operating subsidiaries in Asia, Europe, Latin America and the company’s Metamor consulting business are not involved in the Chapter 11 filings.
Ashburn-based PSINet provides corporate Internet access and private networks, Web and database hosting and managed Internet security. PSINet has total assets of $2.2 billion and total liabilities of $4.3 billion, of which $2.9 billion is bond debt.
The company said it expects to continue to serve customers.
“Our existing capital structure did not permit us to respond to the rapid changes in our markets,” said Harry G. Hobbs, president and chief executive officer of PSINet. He said he expects the Chapter 11 filing “will provide us with the flexibility and time to explore all strategic alternatives while we continue to deliver the reliable service upon which our customers depend.”
The company said it will sell its operations in Canada and Panama if regulators approve. Terms were not disclosed.
PSINet is paying the Super Bowl champion Baltimore Ravens $5.275 million a year for 20 years for the right to put its name in giant purple letters on the Ravens’ stadium.
“We are talking openly with the team, but there is no change in our relationship,” PSINet spokesman Jim Lucas said Friday. Ravens spokesman Shaka Arnold said the filing is not expected to change the naming arrangment. He would not discuss terms of the deal, including whether the contract with PSINet has a bankruptcy clause.
