SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 29, 2000
Pacific Gateway Exchange, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 000-21043 94-3134065
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(State or other jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
500 Airport Boulevard, Suite 340
Burlingame, California 94010
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (650) 375-6700
(Not Applicable)
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(Former name or former address, if changed since last report)
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This report on Form 8-K includes forward-looking statements within
the "safe harbor" provisions of the Private Securities Litigation Reform Act
of 1995, such as statements regarding the debtor-in-possession financing
arrangement and issues relating to listing on Nasdaq. Actual results may
differ materially from those projected due to numerous factors, including:
1) actions taken by the bankruptcy judge, including with respect to the
debtor-in-possession financing arrangement; 2) Nasdaq's decision with
respect to delisting of the Company's stock; 3) the ability to locate
purchasers for the Company's assets and to negotiate and close asset sales;
and 4) the prices at which the Company is able to sell assets. Additional
factors affecting whether forward-looking statements are realized may be
found in the Company's Report on Form 10-K and Report on Form 10-Q, on file
with the SEC.
Item 3. Bankruptcy or Receivership
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On December 29, 2000, the Company filed a voluntary Chapter 11
petition with the U.S. Bankruptcy Court for the Northern District of
California, San Francisco Division. The Chapter 11 case, 00-33019DM, has
been assigned to the Honorable Dennis Montali, United States Bankruptcy
Judge. The Board of the Company determined that it was in the best
interests of the Company and its constituents that this action be taken.
On January 3, 2001, the following subsidiaries of the Company
filed voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for the
Northern District of California, San Francisco Division:
Global Time, Inc.
Onyx Networks, Inc.
World Pathways, Inc.
World Link, Inc.
On January 4, 2001, International Exchange Communications, Inc., a subsidiary
of the Company, filed a voluntary Chapter 11 petition with the U.S. Bankruptcy
Court for the Northern District of California, San Francisco Division. The
subsidiary cases have also been assigned to Honorable Dennis Montali, United
States Bankruptcy Judge.
The Company is negotiating a debtor-in-possession financing
arrangement with Bank of America and Bankers Trust Company and is seeking
Bankruptcy Court seeking approval for the agreement and the financing
contemplated under the agreement.
Although the Company remains open to acquisition proposals, the
Company commenced these chapter 11 cases in order to effectuate an orderly
wind down of the business and to coordinate sales of the assets so as to
maximize the value of those assets.
The Company is represented in connection with its Chapter 11 case
by Klee, Tuchin, Bogdanoff & Stern and Pachulski, Stang, Ziehl, Young &
Jones.
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Item 5. Other Events
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On December 21, 2000, Williams Communications, Inc. ("Williams")
purported to terminate its Mutual IRU Sale Agreement with the Company dated
as of April 27, 1999, eliminating a portion of the Company's current fiber
optic capacity used for its telecommunication services throughout the
United States. On December 26, 2000, the Company notified Williams that the
Company believes this agreement remains in full force and effect and that
Williams is in default of the agreement because of Williams' wrongful
termination of service.
The relationship with the investment banking firm previously
retained by the Company to locate buyers for the Company or its assets has
been terminated.
In addition, Gail Granton resigned as a director and as the
secretary of the Company.
On January 2, 2001 Nasdaq halted trading in the Company's stock.
Also, on January 2, 2001, the Company received a staff determination from
Nasdaq indicating that the Company no longer meets marketplace Rule 4450
(f) as a result of the Company's bankruptcy filing. The staff of Nasdaq
expressed concerns regarding the Company's ability to sustain compliance
with all the continued listing requirements of the Nasdaq National Market,
in light of the bankruptcy filing. Nasdaq conducted a delisting hearing
with respect to the Company's stock on December 14, 2000 and the Company is
awaiting Nasdaq's decision. The bankruptcy filing will be considered an
additional deficiency by Nasdaq in determining whether to delist the
Company's stock. There can be no assurance that Nasdaq will continue to
list the Company's stock on the Nasdaq National Market. If Nasdaq delists
the Company's stock from the Nasdaq National Market, it is possible that
the Company's stock may trade on the over-the-counter bulletin board. In
addition, effective with the open of business on Thursday January 4, 2001,
Nasdaq changed the Company's trading symbol from PGEX to PGEXQ.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Dated: January 10, 2001 PACIFIC GATEWAY EXCHANGE, INC.
By: /s/ David M. Davis
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David M. Davis
Chief Financial
Officer
