CorpraNet buys Atlas' Nixa Internet division

Atlas Communications is slowly emerging from bankruptcy protection.
Almost a year after the 40-year-old Springfield company filed for Chapter 11 bankruptcy, a U.S. Bankruptcy Court judge has approved its reorganization plan, including the sale of its wireless Internet division and a communication tower.
JLD Tech Services Inc., the parent company of Nixa-based CorpraNet, has purchased Atlas’ high-speed wireless Internet customer base in Nixa and equipment for $30,000, according to bankruptcy court documents.
Jim Davidson, president of JLD Tech, said the acquisition adds about 40 customers, mostly businesses, to CorpraNet’s Nixa holdings. The sale closed Feb. 2 by special permission of U.S. Bankruptcy Judge Arthur B. Federman.
Atlas’ reorganization plan also triggered the March 10 sale of a communication tower to Pinnacle Towers Acquisition LLC for $384,500, freeing up cash to make unsecured creditor payments. Empire Bank, Atlas’ largest secured creditor, received $362,574 at the closing.
“They were able to retire an awful amount of debt,” said attorney Raymond I. Plaster, who represents Atlas. “That really substantially decreased the monthly debt service.”
Atlas owes unsecured creditors $778,658, according to bankruptcy papers filed April 20, 2004. Under the plan, Atlas would pay $3,762 monthly into a sinking fund to be distributed to the unsecured creditors. Payments should begin in the third or fourth quarter, depending on when the case is administratively closed, which Plaster expects to happen in 60 to 90 days.
The court initially denied Atlas’ reorganization plan before confirming it March 23.

CorpraNet purchase
While JLD Tech has built a solid dial-up Internet customer base – 2,500 accounts through PIP Internet in the Pomme de Terre area and 150 accounts locally through CorpraNet – the Atlas acquisition builds on CorpraNet’s high-speed wireless division. CorpraNet now serves about 150 businesses, including Springfield Business Journal, Family Pharmacy and the city of Ozark, and 30 residences with high-speed wireless Internet in Nixa, Ozark, Springfield and Mt. Vernon, Davidson said. The company plans to offer high-speed wireless to Republic and Ash Grove – through a recent deal making it a broadband carrier for City Utilities – and Stotts City by summer.
In Nixa, CorpraNet now competes with SBC and cable TV company Cebridge Connections as a high-speed Internet provider.
“I foresee us expanding the residential area,” Davidson said, adding that new towers would be required.

Reinventing Atlas
The nearly yearlong court battle almost ended in liquidation as Atlas filed a motion to convert to Chapter 7 bankruptcy Feb. 7, the final day of a 10-day deadline to amend its reorganization plan. The Chapter 7 conversion request was terminated in a March 11 hearing.
Atlas owner Steve Powell said he is glad the company avoided Chapter 7 liquidation, and he looks forward to reorganizing.
“We are going to reinvent ourselves a little bit,” Powell said. “It just took longer than anticipated.”
The biggest changes are in enhanced dial-up services and concentration on rural markets.
Powell said an accelerator service will improve Internet connections and e-mail functions for the company’s roughly 2,000 dial-up customers. A new content filter also will be rolled into contracts “at no additional charge” within the next few weeks, Powell said.
In March, Atlas began adding spam and virus filters for its 3,000 e-mail customers and about 300 business Web sites it hosts – another effort to build its user-base, Powell said.
At the 1903 S. Glenstone Ave. storefront, Atlas is adding new and used computer sales and repair services.
“We are positive about the future,” Powell said. “Atlas has been here for over 40 years and we look to continue serving the community.”
Powell points to several Internet service contracts he signed about five years ago with SBC as the No. 1 factor for bankruptcy. Shortly after signing on, Powell said SBC dropped its retail pricing.
“(SBC) got to where they would sell DSL to customers cheaper than they would wholesale it to companies like us,” Powell said. “We didn’t need the lines. But because we were under contract, they didn’t let us out of that.”
Atlas was locked in for $30 a month per account, and SBC charged retail customers around $27 monthly, Powell said.
“For us to price it to make a profit, we’d price ourselves out of the market,” Powell said.
The reorganization plan cancels these contracts but requires payment on the more than $75,000 owed SBC at the time of filing.
Powell also cited declines in the paging and dial-up Internet markets. “We had expenses that we were under contract for and we didn’t have the income coming in,” he said.