WorldSpace Files for Chapter 11

Satellite radio network provider WorldSpace Inc, a Maryland company that services more than 170,000 subscribers in Europe, Asia and Africa, has taken a plunge for the worst and filed for Chapter 11.

Satellite radio network provider WorldSpace Inc, a Maryland company that services more than 170,000 subscribers in Europe, Asia and Africa, has taken a plunge for the worst and filed for Chapter 11. With $1.8 billion in debt-facing $2.12 billion in liabilities against only $307.4 million in assets-as well as $1.5 million for two month’s worth of backpay to about 50 employees, CEO Noah A. Samara said WorldSpace has suffered “significant employee attrition.” For now, the fledgling business has managed to stay on its feet through $13 million in hedge-fund loans and continues to pay critical employees in order to operate their worldwide operations.

The fiscal dive comes as no surprise as 1worldspace-the company underwent a brand-name change just this summer-has shown signs of financial trouble for well over a year now. But given the provider’s past involvements in launching well-to-do XM Satellite Radio, which owned significant WorldSpace stock that never showed much of a return, industry pundits wonder whether this fall will mean others like it in years to come. Plans to weather the storm are slim at the moment, but a looming sell-out or recapitalization of the company seems likely if WorldSpace is unable to raise sufficient capital to stay afloat.