Investor Relations

Notice to Shareholders

On November 27, 2002, Genuity Inc. and certain of its U.S. subsidiaries reached a definitive agreement to sell substantially all of their assets and operations to Level 3 Communications for up to $242 million, subject to certain price adjustments.  The sale had the full support of Genuity's two largest creditors, the global consortium of banks and Verizon Communications, which each provided separate lines of credit to Genuity.

 To facilitate the sale, Genuity and certain of its U.S. subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code on November 27, 2002.  The Chapter 11 process allowed Genuity to expedite the sale of its assets while continuing business operations without interruption.

 The sale of substantially all of the U.S. assets and operations of Genuity and certain of its subsidiaries to Level 3 Communications received court approval on January 24, 2003, and the transaction closed on February 4, 2003.

 Genuity is now working to collect outstanding accounts receivable, to sell any remaining valuable assets, and to wind-down its remaining business including its foreign operations.

Genuity cannot predict what impact the filing and sale will have on the price or trading activity of its common stock.  The proposed treatment of Genuity's common stock will be outlined in it's Chapter 11 Plan, which Genuity expects to file with the court in the next few months.

 Shareholders who have questions about their Genuity holdings should contact their financial advisor or broker.

Shareholder FAQ



Please explain the impact of the Chapter 11 process on the shareholders.



In a Chapter 11 case, equity holders are subordinate to all other creditor classes.  In other words, shareholders are last in line in terms of priority for recovery.  The ultimate recovery for each creditor and equity group will not be known until the company’s Chapter 11 Plan is developed and presented to creditors for a vote and ultimately approved by the Bankruptcy Court.



What happens to the value of my investment in Genuity stock now that you have filed Chapter 11?

Genuity cannot predict at this point in the process what impact the filing will have on the price or trading activity of its common stock, nor on the ultimate recovery, if any, for equity holders.  The Chapter 11 Plan, which Genuity plans to file with the Bankruptcy Court in the next few months, will outline the proposed treatment of Genuity shareholders.  However, due to uncertainties regarding the potential claims against Genuity and the amount of available proceeds received from its liquidation, Genuity cannot predict the amount of proceeds that will be available for distribution to creditors.  It is unlikely that Genuity stockholders will receive any proceeds from the liquidation. 



Has the stock continued to trade while Genuity is in Chapter 11?

Genuity stock was delisted from the NASDAQ National Market on December 5, 2002.  Since that time, Genuity’s stock has been trading on the Over-the-Counter Bulletin Board.



What is the Over-the-Counter Bulletin Board (OTCBB)?

The OTCBB is a regulated subscription service that displays real-time quotes, last-sale prices and volume information in OTC equity securities to member brokers.


Did Genuity's ticker symbol change as a result of the bankruptcy filing?

Yes, the stock continues to trade under the symbol "GENQE.OB".


Since Genuity stock has been delisted from NASDAQ, can investors continue to trade the stock?

Yes, the stock trades on the OTCBB.  You may be able to buy or sell Genuity stock on the OTCBB through a broker.  However, because trading in securities of companies that are in bankruptcy proceedings is extremely speculative, we suggest that you consult your financial advisor for additional information.


I am a Genuity shareholder and I recently received a notice from Donlin, Recano & Co. regarding the deadline for filing claims against Genuity Inc.  What is the purpose of this letter and what, if any, actions are required of me?

The notice you received is called a "Bar Date Notice." The purpose of the Bar Date Notice is to inform all parties who may have a claim against Genuity Inc., or any of its subsidiaries, of the need to file a proof of claim in order to receive a distribution from the bankruptcy. Failure to file a proof of claim by the deadline of April 18, 2003 (the "Bar Date") will bar a creditor from receiving a distribution to which they might otherwise be entitled.

Under the Bankruptcy Code, shareholders are not "creditors," but rather "equity security holders." In other words, they have "interests" in the debtors, but not "claims" against them, as a result of their ownership of stock.

As the Bar Date Notice explains at the end of Section 4, if "you are a holder of an equity interest [this includes shares of Genuity Inc. common stock] in the Debtors, you need not file a proof of interest with respect to the ownership of such equity interest at this time." In other words, you need not file a proof of claim at this time in order to receive a distribution, if any, on your shares. However, as Section 4 of the Bar Date Notice further explains, if you have a claim against Genuity Inc. or any of its Debtor subsidiaries that is separate and apart from the value of your common stock holdings, you must file a proof of claim with respect to such claim by the Bar Date in order to receive a distribution in the bankruptcy case.