Rhythms NetConnections Inc. (Former

NASDAQ The Nasdaq Stock Market (; National Association of Securities Dealers Automated Quotations) is an American stock exchange based in New York City. It is the most active stock trading venue in the U.S. by volume, and ranked second on the list ...

: RTHM) was in the business of providing

broadband In telecommunications, broadband or high speed is the wide-bandwidth (signal processing), bandwidth data transmission that exploits signals at a wide spread of frequencies or several different simultaneous frequencies, and is used in fast Inter ...

local-access

communication Communication is commonly defined as the transmission of information. Its precise definition is disputed and there are disagreements about whether Intention, unintentional or failed transmissions are included and whether communication not onl ...

services to large enterprises, telecommunications carriers and their

internet service provider An Internet service provider (ISP) is an organization that provides a myriad of services related to accessing, using, managing, or participating in the Internet. ISPs can be organized in various forms, such as commercial, community-owned, no ...

(ISP) affiliates and other ISPs. The company's services included a range of high-speed, always-on connections that were designed to offer customers both cost and performance advantages when accessing the Internet or private networks. The Company used multiple digital subscriber line (DSL) technologies to provide data transfer rates ranging from 128 kbit/s to 8.0 Mbit/s delivering data to the end user, and from 128 kbit/s to 1.5 Mbit/s receiving data from the end user. The company was delisted from

in May 2001. On August 2, 2001, the company and all of its wholly owned United States subsidiaries voluntarily filed for reorganization under

Chapter 11 Chapter 11 of the United States Bankruptcy Code ( Title 11 of the United States Code) permits reorganization under the bankruptcy laws of the United States. Such reorganization, known as Chapter 11 bankruptcy, is available to every business, w ...

of the United States Bankruptcy Code. Also in August 2001, the Company sent 31-day service termination letters to all of its customers.

Lawsuit

A protracted class action securities lawsuit against the officers and directors of Rhythms NetConnections was settled on April 3, 2009. Judge John K. Lane of the U.S. District Court for the District of Colorado gave his final approval to a $17.5 million settlement. Judge Lane also awarded the plaintiffs' attorneys, Milberg LLP, Stull Stull & Brody and The Shuman Law Firm, 30% of the settlement fund and an additional $2.6 million in expenses from the fund. A class of shareholders, who purchased shares in Rhythms NetConnections between Jan. 6, 2000, and April 2, 2001, brought the case. The lawsuit alleged that the officers and directors “knowingly or recklessly” made false statements about the company's subscriber line count, growth and financial condition in an effort to inflate its stock price. At one time,

Enron Enron Corporation was an American Energy development, energy, Commodity, commodities, and services company based in Houston, Texas. It was led by Kenneth Lay and developed in 1985 via a merger between Houston Natural Gas and InterNorth, both re ...

owned 5.4 million shares of Rhythms NetConnections stock.McLean & Elkind, ''The Smartest Guys in the Room'' p191

References

Summary of Class Action Suit

External links

* {{web archive, url=https://web.archive.org/web/20000815093445/http://www.rhythms.com/, title=Official website
InternetNews.com article - Rhythms NetConnections to End ServiceThe Register - Fattest Fat Cats Ever? - Article on Bonus Payouts to CEO and COO that occurred 3 days prior to bankruptcy
Verizon Defunct networking companies Companies disestablished in 2001

Lawsuit

See also

References

External links