VIA NET.WORKS Publishes Questions and Answers on Status of Company

WILMINGTON, Delaware USA, July 31, 2007.  VIA NET.WORKS (VNWI.PK) announced today that its board of directors had authorized the posting of the following questions and answers regarding the current status of the company:

Q.  What is the current status of the company?

A.  Subsequent to the October 2005 closing of the sale of all its remaining operations to Interoute SA (see article), VIA NET.WORKS (VIA or the Company) adopted a Plan of Complete Liquidation and Dissolution (the Plan of Dissolution) and, on November 4, 2005, filed a certificate of dissolution with the Chancery Court of the State of Delaware.  (Click here to see VIA's September 2005 Proxy Statement, which included its Plan of Dissolution).  As of that date, the Company was dissolved in accordance with Delaware law.  Since then, VIA has proceeded in accordance with the Plan of Dissolution.  Under the Plan, the Company has proceeded to liquidate its remaining assets, satisfy or make reasonable provisions for its remaining obligations and otherwise has proceeded in accordance with the provisions of Delaware General Corporation Law on the dissolution and winding up of corporations.

The Company maintains a board of directors comprised of two individuals and also has retained two officers, the CEO and President, and the Secretary and Vice President, General Counsel.  The Company has retained no employees.  Both of the officers are retained on a limited contractual basis to support the board of directors in implementing the Plan of Dissolution.

The Company is not engaged in any revenue generating activities, but does earn interest on its cash reserves.  VIA has ongoing expenses associated primarily with final tax reporting, ongoing accounting and administrative services, legal and consulting fees, and also incurs ongoing accrued expenses associated with the 12% cumulative dividend (Dividend) payable upon liquidation to the holders of the Series A Preferred Stock (Series A Stock).

The Company is not prosecuting any legal actions or proceedings. We continue however to be a defendant in the so-called IPO Litigation. On November 5, 2001, we were named as a defendant in a class action lawsuit in the United States District Court for the Southern District of New York against VIA NET.WORKS, Inc., certain of the underwriters who supported our initial public offering (IPO) and certain of our officers, under the title O'Leary v. Via Net.works [sic] et al [01-CV-9720] (Complaint). An amended complaint was filed in April 2002. The Complaint alleges that the prospectus we filed with our registration statement in connection with our IPO was materially false and misleading because it failed to disclose, among other things, that: (i) the named underwriters had solicited and received excessive and undisclosed commissions from certain investors in exchange for the right to purchase large blocks of VIA IPO shares; and (ii) the named Underwriters had entered into agreements with certain of their customers to allocate VIA IPO shares in exchange for which the customers agreed to purchase additional VIA shares in the aftermarket at pre-determined prices (Tie-in Arrangements), thereby artificially inflating the Company's stock price. The Complaint further alleges violations of Sections 11, 12 (a)(2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 arising out of the alleged failure to disclose and the alleged materially misleading disclosures made with respect to the commissions and the Tie-in Arrangements in the prospectus. The plaintiffs in this action seek monetary damages in an unspecified amount. Approximately 300 other issuers and their underwriters have had similar suits filed against them, all of which are included in a single coordinated proceeding in the Southern District of New York (IPO Litigation).  In June 2003, a committee of our board of directors approved a proposed partial settlement with the plaintiffs in this matter. The settlement would have provided, among other things, a release of the Company and of the individual defendants for the alleged wrongful conduct in the action in exchange for a guarantee from our insurers regarding recovery from the underwriter defendants and other consideration from the Company regarding our underwriters.  The plaintiffs have continued to litigate against the underwriter defendants.  The district court directed that the litigation proceed within a number of "focus cases" rather than in all of the 310 cases that have been consolidated.  Our case is not one of these focus cases.  On October 13, 2004, the district court certified the focus cases as class actions.  The underwriter defendants appealed that ruling, and on December 5, 2006, the Court of Appeals for the Second Circuit reversed the district court's class certification decision.  On April 6, 2007, the Second Circuit denied plaintiffs' petition for rehearing.  In light of the Second Circuit opinion, our counsel has informed the district court that the proposed settlement cannot be approved because the defined settlement class, like the litigation class, cannot be certified.  We cannot predict whether we will be able to renegotiate a settlement that complies with the Second Circuit's mandate.  Due to the inherent uncertainties of litigation, we cannot accurately predict the ultimate outcome of the matter.  At present, the IPO Litigation is the only litigation in which the Company is a party.

Q.  When will the shareholders receive any payment from the liquidation?

A.  The board of directors of the Company has not established a timetable for making distributions to shareholders. The timing of any distributions will depend on our ability to resolve, and pay or provide for the payment of all remaining claims and obligations. The existence of unknown claims and obligations may require us to establish a contingency reserve, which could delay any distributions to shareholders until the claims are resolved. For example, the ongoing IPO Litigation and the uncertainty of its outcome have delayed and may continue to delay a distribution to shareholders.  Distributions also could be delayed if the board of directors determines that it is in our best interests and the best interests of our shareholders and creditors to effectuate the dissolution in accordance with the alternative procedures set forth in Sections 280 and 281(a) of the Delaware General Corporation Law.

Q.  How much cash will be available for distribution to shareholders?

A.  As of June 30, 2007, we had an estimated $6.6 million in total cash reserves available.  Of that amount, the net cash that will be available for distribution to shareholders (including the $2.4 million liquidation preference to the holder of the Preferred Shares) will depend primarily on when the Company will be in a position to make a distribution to shareholders, which in turn depends largely on the outcome of the IPO Litigation.  The plaintiffs in that suit have not specified the damages that they are seeking against the Company.  The proposed settlement of the matter would have not required any cash payment from the Company.  However, as noted above, the issuers, including the Company, now assert that the settlement cannot be approved because of the recent Second Circuit's opinion. As a result, we have to date not been able to determine a fixed amount to set aside out of our cash reserves to secure any potential ultimate liability arising from this suit.  The cash reserves are invested a variety of low risk liquid investments, which have earned and continue to earn interest income at rates of up to 5.2% per annum.  The Company accrues expenses relating to the Preferred Stock Dividend in the amount of approximately $24,000 per month.  The Dividend will continue to accrue until we make a liquidating distribution to the holders of the Preferred Stock, at which time the accrued Dividend will be paid.  In addition, we incur ongoing expenses relating to officer and director compensation, and accounting and legal fees, and we expect to incur additional expenses associated with corporate tax filings for the Company.

For further inquiries, contact VIA NET.WORKS

By mail: VIA NET.WORKS, Inc., c/o Walter Miller, CPA, 107 Stonewall Court, PO Box 986, Stuart VA 24171, United States

By e-mail: info@vianetworks-ir.com