Covad To File Chapter 11

Financially troubled data access provider Covad Communications Group Inc., said it will file for voluntary prenegotiated Chapter 11 bankruptcy protection as it negotiates with bondholders to eliminate its $1.4 million of existing debt.

Covad is one of three major providers of DSL services to fall on hard times. Northpoint Communications folded earlier this year, and Rhythms NetConnections filed for bankruptcy last month. Covad moved off of Nasdaq and onto the OTC Bulletin board late last month.

Under the terms of the restructuring, the bondholders will exchange their bonds for cash and preferred stock. With retirement of the bond debt, Covad said it expects to emerge from bankruptcy by January 2002. The company, which has more than 330,000 end users, expects to operate in the normal course of business during its restructuring.