SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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): APRIL 13, 2004
FN ESTATE, INC.
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(Exact name of registrant as specified in its charter)
PENNSYLVANIA 0-29255 23-2767197
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
TWO COURTNEY PLACE, SUITE 130, 3864 COURTNEY STREET, BETHLEHEM, PA 18017
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(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (610) 266-6700
FASTNET CORPORATION
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(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS AND REQUIRED FD DISCLOSURE
As previously reported, on December 15, 2003, FN Estate, Inc. (f/k/a FASTNET)
and its debtor subsidiaries (together with FN Estate, the "Companies") completed
the sale of substantially all of their assets, including their Broadband and
Dial Up Internet Access, Co-location, and Managed Hosting business units, to US
LEC Corp. for an estimated $8.5 million, plus the assumption of certain
liabilities. The $8.5 million consisted of $6.0 million in cash, subject to
adjustment, $1.5 million in a promissory note and Class A Common Stock of US LEC
Corp with a market value of $1 million at closing. This sale was completed
pursuant to the provisions of the United States Bankruptcy Code, and the sale
procedures established by the Bankruptcy Court, including an auction process. An
order approving such sale was issued by of the United States Bankruptcy Court
for the Eastern District of Pennsylvania, Case No. 03-23143, on December 4,
2003. This transaction did not include assets associated with the Companies' Web
Development business, upstate New York wireless Internet access business and
certain wireline customers in upstate New York, which were sold in subsequent
transactions as described below, and certain non-operating fixed assets and
receivables from former customers.
On January 15, 2004, the Companies completed the sale of substantially all of
their assets associated with their Web Development business to a group of
noteholders of NetReach, Inc., a subsidiary of FN Estate, in exchange for the
surrender and transfer to FN Estate of promissory notes of NetReach, Inc. in the
aggregate principal amount of $760,000 and in consideration of the assumption of
certain liabilities. This sale was completed pursuant to the provisions of the
United States Bankruptcy Code.
On April 30, 2004, the Companies completed the sale of substantially all of
their assets used or associated with their wireless Internet access operations
located in Rochester, New York to CBTEK, LLC, a New York limited liability
company, for an estimated $155,000, plus the assumption of certain liabilities.
This sale was completed pursuant to the provisions of the United States
Bankruptcy Code.
On May 4, 2004, FN Estate completed the sale of all of its information relating
to certain customers in connection with FN Estate's wireline operations in the
State of New York to Choice One Communications of New York, Inc., a New York
corporation ("Choice One"), and agreed to cooperate during a finite period of
time in the migration of such customers to the Choice One network. Pursuant to
the asset purchase agreement entered into by FN Estate and Choice One, Choice
One is obligated to pay to FN Estate a percentage of the charges collected by
Choice One on or before April 30, 2005 from the customers that migrate to Choice
One on or before June 30, 2004. This sale was completed pursuant to provisions
of the United States Bankruptcy Code.
The Companies are in the process of selling any remaining non-operating fixed
assets and collecting receivables from former customers. The Companies
anticipate filing a plan of liquidation with the Bankruptcy Court no later than
August 31, 2004, followed by a winding up of their affairs. It is not
anticipated that there will be any funds available for distribution to
shareholders of FN Estate.
This report contains comments or information that constitute "forward-looking"
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements inherently involve significant risks and
uncertainties that could cause actual results to differ materially from the
forward-looking statements. The forward-looking statements in this report
include, among others, statements relating to the liquidation of the Companies,
as well as the anticipated results thereof. The risks and uncertainties include,
but are not limited to, the uncertainties related to the bankruptcy proceedings
and implementation of a plan of liquidation, possible objections to a plan of
liquidation from parties in interest in the Companies' Chapter 11 proceedings
and certain other factors set forth in FN Estate's Form 10-K for the year ended
December 31, 2002, as amended, and Form 10-Q for the quarter ended June 30,
2003.
The forward-looking statements included in this report are based on information
available to FN Estate as of the date of this report, and FN Estate assumes no
obligation to update any of these statements.
Pursuant to the procedure prescribed in Staff Legal Bulletin No. 2, on November
14, 2003, FN Estate sought a no-action position from the Staff of the Securities
and Exchange Commission that would permit FN Estate to file, under cover of a
Current Report on Form 8-K, its periodic financial reports filed with the
Bankruptcy Court, in lieu of its annual and quarterly reports under the
Securities Exchange Act of 1934. To date, the Staff has not officially granted
the request. Nonetheless, in conformity with its requests and the provisions of
Staff Legal Bulletin No. 2, FN Estate files herewith as Exhibits 99.1, 99.2 and
99.3 its monthly operating reports for the period commencing October 1, 2003 and
ended October 31, 2003, and the period commencing November 1, 2003 and ended
November 30, 2003, and the period commencing December 1, 2003 and ended December
31, 2003 respectively (collectively, the "Monthly Operating Reports"), which
were filed with the Bankruptcy Court on April 13, 2004, April 20, 2004, and June
2, 2004 respectively.
FN ESTATE CAUTIONS READERS NOT TO PLACE UNDUE RELIANCE UPON THE INFORMATION
CONTAINED IN THE MONTHLY OPERATING REPORTS. THE MONTHLY OPERATING REPORTS
CONTAIN FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION THAT HAVE NOT BEEN
AUDITED OR REVIEWED BY INDEPENDENT ACCOUNTANTS, ARE NOT PRESENTED IN ACCORDANCE
WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, AND MAY BE SUBJECT TO FUTURE
RECONCILIATION AND ADJUSTMENTS. THE MONTHLY OPERATING REPORTS ARE LIMITED IN
SCOPE, COVER LIMITED TIME PERIODS, AND ARE IN A FORMAT PRESCRIBED BY THE
APPLICABLE BANKRUPTCY LAWS. THERE CAN BE NO ASSURANCE THAT THE OPERATING REPORTS
ARE COMPLETE.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
Exhibit No. Description of Document
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99.1 Monthly Operating Report for the Period October 1,
2003 to October 31, 2003.
99.2 Monthly Operating Report for the Period November 1,
2003 to November 30, 2003.
99.3 Monthly Operating Report for the Period December 1,
2003 to December 31, 2003.
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SIGNATURES
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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.
FN ESTATE, INC.
By: /s/ R. Barry Borden
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R. Barry Borden
Chief Executive Officer
Dated: June 2, 2004
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EXHIBIT INDEX
Exhibit
Number Document Description
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99.1 Monthly Operating Report For The Period October 1, 2003 to
October 31, 2003.
99.2 Monthly Operating Report for the Period November 1, 2003 to
November 30, 2003.
99.3 Monthly Operating Report for the Period December 1, 2003 to
December 31, 2003.