PSINet Files for Bankruptcy Protection

PSINet Inc. and a number of its affiliates filed for protection under Chapter 11 of the US Bankruptcy Code on May 31, 2001, having debts in excess of US$4.4 billion including US$3.5 billion in senior unsecured notes. At the same time, PSINet Limited and a number of its Canadian affiliates (PSINet Canada) filed for protection under the Companies’ Creditors Arrangement Act showing aggregate liabilities in excess of approximately $420 million. Concurrent with the filings, PSINet Inc. announced that TELUS Corp. has entered into a non-binding letter of intent in respect of a possible acquisition of the assets of PSINet Canada.

PSINet Inc. is a leading provider of Internet access and related services, supported by PSINet’s global fibre-optic cable and hosting systems which serve over 900 metropolitan areas in 27 countries. PSINet Inc.’s consolidated shareholder deficit, as reported in its audited consolidated financial statements as of December 31, 2000, was US$2.02 billion and its aggregate loss from operations during December 31, 2000, was approximately US$3.4 billion. TELUS Corporation is one of Canada’s leading telecommunications companies, providing a full range of telecommunications products and services.

Osler, Hoskin & Harcourt LLP acts in Canada on behalf of the PSINet Group, with a team headed by Edward Sellers and including Rupert Chartrand and Natasha MacParland (insolvency), Lyndon Barnes, Fred Myers and Nancy Roberts (litigation), Shelley Obal, Jacqueline Code and Gayle Wadden (research), Mark Trachuk, Gina Caldarelli, Jennifer Campbell, Alison Wilkie and Chandler Lauzon (corporate), Jim Hassell, Landon Young and Kari Abrams (labour), Greg Wylie (tax) and Kirsten Embree (regulatory) and Peter Franklyn and Shuli Rodal.

PricewaterhouseCoopers Inc. (Chris Clark, Greg Watson and Nigel Meaken) is serving as court-appointed Monitor in the CCAA proceedings and is being represented by Goodmans LLP’s Geoffrey Morawetz and Candy Schaffel.

TELUS Corporation is represented by Edmonton in-house counsel Stewart Douglas and Brad Cowburn and a Bennett Jones LLP team headed by Paul Blundy (corporate) and Mark Laugesen (insolvency) and including Robyn Bell (litigation), Raj Sahni (insolvency), Scott Martyn (real estate), Merv Allen (corporate), Brad Gilmour (regulatory/environmental), Vanessa Yeung (corporate), Ron Ouellette (labour) and John Gilmore (labour). Competition Act advice was provided by Stan Wong and Kevin Wright of Davis & Company.