Redback Networks, which at one time was the rising stars of the networking universe has filed for bankruptcy protection, in a desperate bid to right size itself.

bq. “Court approval of the prepackaged plan would remove existing debt of $467 million and reduce operating expenses by a third, greatly reducing the hurdles to reaching profitability, and easing concerns surrounding our balance sheet,” said Kevin DeNuccio, president and chief executive officer of Redback Networks. “As we already have the affirmative votes from a majority of creditors, we expect the pre-packaged reorganization to move quickly. We look forward to a swift completion of the restructuring process we announced in July.”

The filing is a clear sign of two things – despite all the hoopla around the comeback of the telecom markets, it is more Wall Street myth than reality. Secondly, Redback might not be winning much DSL-related business these days, which it seems is still favoring Alcatel’s solutions.