Struggling Service Provider, Customers Seek Help

NorVergence is attempting to obtain additional funding needed to run daily operations.

July 20, 2004

2 Min Read
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Some 7,000 small and medium-sized companies across the country, fearful of being left in the lurch by the bankruptcy of New Jersey-based NorVergence Inc., are scrambling to find replacement and backup services. Several firms, including BellSouth and Global Crossing, have stepped forward, suggesting that NorVergence customers contact them to keep their data, long-distance, and Web services in force. Meanwhile, NorVergence said it is attempting to obtain "additional funding needed to run daily operations."

Global Crossing has set up a hotline dedicated to NorVergence customers. "We've been answering the phones like crazy," said a representative at the Global Crossing hotline on Tuesday. "[NorVergence] customers are looking for data, long-distance, Web services--Tier One services." While most of the businesses calling the hotline were still receiving service from NorVergence, they are worried that they could "go dark" at any time, the representative said.

NorVergence said an involuntary bankruptcy petition had been filed against the company under Chapter 11. In a statement on its customer service line, NorVergence said Tuesday it was seeking additional funding and that the company was maintaining service to its customers. "Our operating systems are intact," the recorded announcement stated. "Key personnel have been retained. Again, our primary concern is the continued uninterrupted service to our customers."

Press reports stated that NorVergence owes at least $30 million to creditors. The firm attempted to file Chapter 7 voluntary bankruptcy proceedings last week, but was moved into Chapter 11 in court.

Another firm that jumped in to address the NorVergence customer base is BellSouth, which referenced its hotline--1-866-497-SAVE. A spokeswoman at BellSouth said the company has received many calls for help from businesses afraid of losing service. "We can help if they're in our region," she said, noting that BellSouth serves nine states in Southeast United States.According to NorVergence press information, the firm was founded in 2001. The company's chief operating officer, Alex Wolf, said NorVergence's flagship MATRIX service was aimed at small, medium and large business enterprises, which allow its customers to cut communications costs from 25 to 30 percent. The firm referred to itself as a "$200 million dollar business and equipment and systems engineering company."

Some customers complained that they couldn't reach anyone at the firm. In a statement, the company said: "We are in the process of obtaining an agreement to receive additional funding needed to run daily operations."

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