As backup, Rhythms was working closely with NorthPoint ISPs, ready to assume the customers. No direct Rhythms bid for the customers materialized, so instead a coalition of ten ISPs began talking with NorthPoint. But given uncertainty, NorthPoint put out a warning to customers that shutdown was imminent. Worldcom and other NorthPoint vendors were suggesting Monday at 1 was the cutoff. The court, without specific guidance from regulators mandating maintaining subscriber service, took the highest bid on behalf of the banks and other creditors.
Bankruptcy court is a brutal place, regularly making tough calls like that.
By U.S. law, creditors had priority, and took precedence in any decision. Thursday, the ISPs asked NorthPoint to suggest a limited network that would keep live most of the subscribers. NorthPoint believed the banks would allow continuing the network only if a plan could be devised that covered all network costs, and satisfied the banks on ISP receivables. Backbone providers were insisting on continuing payments that hadn't been included in the Thursday calculation, to cover the full network for a two to three week shutdown period. The Friday estimates hadn't been that large, and many of the ISPs were startled at the increased figure.