ExciteAtHome nearing its last exit

Associated Press

SAN FRANCISCO — Bankrupt ExciteAtHome will auction off the last pieces of its defunct high-speed Internet access service today, putting the finishing touches on a fire sale that has extracted about $60 million from a business valued at $28 billion three years ago.

The public auction, to be held at ExciteAtHome’s Redwood City headquarters, will close another chapter in one of the most exasperating failures during the dot-com bust.

But it won’t end the strife stirred up by ExciteAtHome’s bankruptcy filing eight months ago.

The company’s investors plan to pursue lawsuits blaming ExciteAtHome’s demise on the alleged misdeeds of its former cable partners, chiefly AT&T, Comcast and Cox Communications. The damages could run as high as $9 billion, according to a group of about 200 ExciteAtHome shareholders fighting to become the lead representatives in a class-action securities suit filed in a New York federal court.

Besides saddling creditors and investors with billions in losses, ExciteAtHome’s downfall wiped out the jobs of its 3,000 employees and infuriated many of the company’s more than 4 million subscribers.

About 850,000 customers temporarily lost their Internet service late last year when AT&T declined to pay extra money to continue using the high-speed cable network.

Most of ExciteAtHome’s other cable partners agreed to pay a total of $359 million in additional fees to keep the high-speed service running until alternative networks were built.

Since the ExciteAtHome service shut down nearly three months ago, a handful of employees and lawyers have continued to sell the company’s remaining assets to help pay a fraction of $1.25 billion in bankruptcy claims.

ExciteAtHome sold most of its most valuable property, including its Web sites, before this week’s auction, which is expected to net at least $1.2 million for the company, according to a liquidation plan filed with the San Francisco bankruptcy court presiding over the case.

The auction will feature many of the by-now familiar trappings of dot-com liquidation sales — computer networking equipment, personal computers, television sets, fancy office chairs and the usual diversions of the Internet business culture — a foosball table, two pool tables and a couple of video arcade games.

ExciteAtHome also will sell a few pieces of memorabilia, including a soap box car and the company car — a 1995 BMW.

Although it’s not part of this week’s auction, the parking lot outside ExciteAtHome’s mostly deserted headquarters is even up for sale. The company has worked out a deal to sell the parking lot for as much as $5.5 million if a developer can win a zoning change to permit homes to be built on the site, according to its liquidation plan.

The company has generated just under $60 million from asset sales negotiated since September, with the largest chunks coming from the sale of its online portal, Excite.com, and its holdings in Japan.

The buyers are getting the assets at a sharp discount. When ExciteAtHome’s stock peaked at $99 in the spring of 1999, the company’s market value stood at $28 billion.

The liquidation of assets, coupled with the additional fees that it charged its cable partners and the cash it had in its bank account before the bankruptcy, is expected to give ExciteAtHome somewhere between $250 million and $320 million to distribute to its creditors.