Less than two months after filing for Chapter 11 bankruptcy protection, RCN Corp. chairman and CEO David McCourt said he would relinquish the CEO role at the company he founded and would lead the search to find his replacement.
McCourt will remain as chairman of the company he founded in 1997. RCN filed a prepackaged Chapter 11 bankruptcy petition in May.
“I remain committed to the competitive vision that RCN established when I founded the company,” McCourt said in a statement. “Now, as we enter the next stage of our evolution, I want to bring in new leadership to work with the new equity holders to continue our journey towards what I believe is a very promising future for the company.”
According to a press release, RCN said McCourt will remain as CEO until a successor is found. It is hoped a new CEO is named upon completion of RCN’s restructuring process, the company said.
McCourt has been toying with the idea of a new CEO for years. In an April 2001 interview in The New York Times, McCourt said that while he had no intention of leaving the company, he conceded that the day may come when he would no longer be the person to run RCN’s day-to-day operations.
“It takes a different skill set to come up with an idea and start a company than it does to run it and maybe take it to the next level,” McCourt told the Times in 2001. “Might I be chairman at some point and someone else is CEO? Maybe. But I will see RCN’s dream become a reality. I’m not going to sell out. I think I’m qualified to finish that dream.”
RCN director of investor relations Jim Downing said that RCN has not hired a search firm to find a new CEO yet.
But he added that McCourt intends to play a very active role in the company even after one is selected.
“Mr. McCourt felt that now (vs. 2001) is the right time to bring in a day-to-day operations person,” Downing said. “Mr. McCourt will be an active chairman, focusing on succession planning, rollouts of new products, acquisitions and divestitures and continuing to hold meetings with RCN employees to keep morale high.”
Downing said that while finding a CEO with both cable and telephone company experience would be helpful, the company is looking for someone who would be the “right overall fit” for RCN.
RCN has not yet filed a reorganization plan, but it is expected to emerge from bankruptcy protection before the end of the year.
As part of the prepackaged deal, RCN would reduce its debt from about $1.7 billion to $480 million, swapping most of its debt for equity in a newly emerged company and establishing new bank lines to pay off secured creditors.