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Money scarce at Excite@Home
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October 15, 2001: 3:21 p.m. ET
Beleaguered company bounces numerous pay and reimbursement checks.
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NEW YORK (CNNmoney) - Embattled broadband Internet service provider and media company Excite@Home has issued numerous checks to former and current employees that have bounced, the company confirmed Monday.
News of the bounced checks, which were issued as final paychecks to laid off employees as well as reimbursement payments to current and former employees, was first reported in Monday's edition of the New York Post.
A company spokeswoman confirmed the report Monday. "This is an unfortunate situation and not one the company wants to be in, but is part of the reality of bankruptcy," the spokeswoman said.
The company, which last month filing for bankruptcy protection and sold "essentially" all of its broadband Internet access business to AT&T (T: down $0.79 to $19.20, Research, Estimates) for $307 million, has the cash available to make the payments, the spokeswoman said.
However, the Excite@Home (ATHMQ: Research, Estimates) bankruptcy committee - made up of senior creditors appointed in a bankruptcy proceeding - made the decision not to honor the checks, she said.
The spokeswoman said all current employees whose expense checks have bounced will be issued new, valid checks. The company has filed the appropriate motions with the bankruptcy court to have new checks issued to its former employees as well, she said.
Excite@Home has been struggling with a cash crunch for several quarters, pinning its troubles in large part on its failing media business, through which it operates the Exite.com Web portal as well as other properties. The company has been seeking for a buyer for its media business, but so far none have emerged.
Before it announced the bankruptcy proceedings and its deal with AT&T, the company announced that it would lay off 500 employees over the next three months. At that time, the company said Excite.com will be reduced to the most popular content and services, such as e-mail, instant messaging and Internet search functions. 
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