Hawaiian Telcom turns to Chapter 11

Hawaiian Telcom has filed for bankruptcy, a move that will not come as much of a surprise to folks who have been following the firm's struggles over the last year. The telco suggested recently that it was looking at bankruptcy as one possible course for dealing with about $1 billion in debt. Hawaiian Telcom last month also missed a $26 million interest payment. The company took on all the debt as part of its $1.6 billion buyout by Carlyle Group a few years ago.

The acquisition has since come to be seen as one of the initial private equity-driven telco buyouts, a trend that continued through this year's debt market crisis. Another deal with big-time private equity involvement--the pending acquisition of Bell Canada Enterprises--appears to be in doubt over financing issues.

The company is 125 years old, founded about two years before the original AT&T. It has about 1,400 employees and 300,000 customers.

For more:
- Forbes has the Associated Press report [1]

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Carlyle Group has faced heat over the Hawaiian Telcom acquisition [2]
Hawaiian Telcom got a brief boost from selling its directory unit [3]