The former chief executive officer of REANET, J. Kelly Bloomer, resigned on Tuesday to avoid a conflict of interest during the sale of the company’s controlling interest.

Bloomer has served as REANET’s CEO for the past two years and will now chair REANET Telecom Corporation — a company of investors who plan to buy controlling interest in REANET.

"One day I was CEO of REANET, and I was very proud to wear that hat, and then with the development of the investors that we have been negotiating the commitment from — they wanted me to assume the role of chairman of a new company that would oversee not only REANET, as we know it today, but other companies," explained Bloomer.

Neal Stephens, the general manager of Empire Electric Association in Cortez, and Dave Porter, the CEO of La Plata Electric Association, the electric cooperatives who own the controlling interest in REANET, took over for Bloomer on Wednesday. Stephens said the position is "very temporary" and he will still act as general manager of Empire during the interim period.

According to Bloomer, REANET Telecom, the company interested in buying REANET, was formed by several unnamed private groups. One of the parties negotiated with REANET on the condition that REANET expand its current $100 million business plan.

"There is substantial additional money for the expansion of the company that will embrace other markets in addition to what REANET has already anticipated," explained Bloomer.

Negotiations for the sale have been completed, but the deal has yet to be finalized. "Everyone agrees that we want to make it happen soon, but that’s all I can say," Bloomer said.

Empire and LPEA started REANET, formerly Tri-Corners Telecommunications, Inc., in 1997 as a joint telecommunications venture — each guaranteeing a $7.5 million loan to build REANET’s Durango facilities.

Since then, the company has used its Internet Service Provider operations in western Colorado, New Mexico and Utah to acquire over 15,000 customers and currently employs 60.

"In the course of the evolution of the company, initially the two founding shareholders, Empire and La Plata, envisioned a little telecom company that would just offer high-speed services to Cortez and Durango," explained Bloomer.

"The closer we looked at the business and the more that we listened to the boards of directors of both Empire and La Plata, it became evident that although the power companies wanted to do something to bring telecommunications to the region, they really didn’t want to bear any more risk than they absolutely had to."

If the sale goes through, REANET Telecom will retire the $15 million loan guaranteed by Empire and LPEA, and purchase the majority of stock Empire and LPEA hold in the company. REANET Telecom also plans to complete the investment for the $100 million business plan.

Empire and LPEA will retain an equity interest in the company that is yet to be determined, and will continue to be involved on the board of directors.

Other shareholders in the company include Delta-Montrose Electric Association, Inc., San Isabel Electric Association, Inc., Sangre De Cristo Electric Association, Inc., San Luis Valley Electric Association, Inc. and other private investors.

Stephens said that REANET’s current business plan would be evaluated while current operations continued, and Raymond Keith has been hired to serve as REANET’s general manager.