It has agreed to sell all its broadband internet access business assets and related services to AT&T for $307m (£208.5m) in cash.
The Chapter 11 filing will allow Excite@home to maintain operation of its internet access services until the sale is approved. Its high-speed internet access business has 3.6m customers worldwide.
The deal will leave the company with its loss-making content businesses, including the Excite search engine. AT&T has agreed to hire a significant number of the 1,600 staff who currently work for Excite@home.
The company's shares, which trade on the Nasdaq, closed at 15c (10p) on Friday. During the dotcom boom they once traded as high as $55 (£37.36).
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