Broadview Networks on Wednesday filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York that includes a "pre packaged" restructuring plan.
The New York-based service provider said the restructuring plan, which has already been approved by senior secured noteholders on Jul. 13, will eliminate half of the company's debt under its existing senior secured notes and lower its interest payments by $18 million a year. In July, 80 percent of noteholders voted to accept the plan.
Senior note holders that were owed $317 million will be paid with $150 million in new notes and new stock, while $13.9 million owed to CIT Group Inc. will be paid in full and carries over unsecured debt in full to the reorganized company.
With the reduced debt load, Broadview said it will be able to lower its interest expense by almost $17 million annually, giving it more financial flexibility to pursue more "cloud-based growth opportunities."
During this restructuring period, Broadview will continue to operate as usual without any disruption. In addition, the CLEC will pay its suppliers and vendors in full during and after this process, while paying employees on time.
While the restructuring plan needs court and regulatory approvals, Broadview anticipates it will be able to complete the process by Q4 2012.
- see the release
- Dow Jones Newswires has this article
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