Hancock Net firm seeks bankruptcy protection

HANCOCK – Debts totaling approximately $300,000 caused a local Internet service provider to seek protection from creditors.

Panax Communications Inc., which has offices on Washington Junction Road, filed for Chapter 11 bankruptcy protection Dec. 3 after the company officers, Kenton Griffith of Surry and Richard Baker of Ellsworth, decided it was “in the best interest” of the company to do so, according to documents filed in U.S. Bankruptcy Court in Bangor.

The company owes $257,000 to communications giant Verizon and has 18 other creditors to whom it owes approximately $45,500, according to the documents. Of the lesser sum, $27,500 is for outstanding advertising bills, according to the documents.

Griffith, the president and chief executive officer, said Tuesday the company filed for bankruptcy protection voluntarily in order to pay off Verizon on Panax’s terms. He said Panax was not billed by Verizon for the 18 months before October, when it received the $257,000 outstanding balance all at once.

“We are still solvent and will remain strong,” Griffith said. He said Panax likely will have to remain under bankruptcy protection for 18 to 20 months until it can pay off Verizon and resume “business as usual.”

Griffith said the company has 10 full-time employees, including himself, and it still offers Internet hookups in all communities in the state serviced by Verizon. The filing is considered a restructuring and does not spell the end of Panax, he said.

“I’m fully confident for the future,” Griffith said.

Griffith and Baker, the company treasurer, each own 50 percent of the Internet firm, which reported $745,000 in gross income over the 12 months before its filing, according to documents.

Panax had an estimated gross monthly income of $55,000 before seeking bankruptcy protection, and, with monthly expenses of $47,500, netted an average income of $7,465.

Panax had monthly equipment rental and leases totaling $36,770 before filing for bankruptcy protection, according to the documents.