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Amp'd Mobile may be near end

July 21, 2007|James S. Granelli | Times Staff Writer

Cellular company Amp'd Mobile Inc., hurt by rapid growth and a deadbeat youth market, could close its doors as early as Monday after a bankruptcy court hearing on its inability to pay its network lease.

The Los Angeles-based company is expected to notify its 100,000 U.S. customers over the weekend about the possible closure while it works on contingency plans.

Amp'd Mobile said in court filings this week that it could not obtain financing to continue operating and planned to auction its assets, including its Canadian and Japanese ventures.

The foreign operations are solvent and not part of the bankruptcy petition Amp'd Mobile filed June 1, only 17 months after launching service.

A U.S. Bankruptcy Court judge in Delaware is expected to rule Monday on a motion by Verizon Wireless to terminate a wholesale contract to provide Amp'd Mobile network services because the smaller company owes it $33 million, Amp'd Mobile's biggest unsecured debt.

Verizon's notice of default in May and demand for payment precipitated Amp'd Mobile's bankruptcy filing. Among Amp'd Mobile's other creditors is handset maker Motorola Inc., which is owed $16.4 million.

Amp'd Mobile, which rocketed from 30,000 customers last September to 200,000 in April, has lost half its customer base. Most were let go for failing to pay their bills.

The company was working on ways its primarily 18- to 24-year-old customers could pay their bills over the phone or online, when its own debts came crashing down.

On Thursday, many Amp'd Mobile workers were told to go home for now, said one employee who did not want to be identified for fear of losing her job, even though she expected to be out of work Tuesday.

Amp'd Mobile had as many as 360 employees this year, but the company could not say Friday how many remained.

james.granelli@latimes.com

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