Broadview Networks files for Chapter 11 protection

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.

For more:
- see the release
- Dow Jones Newswires has this article

Special report: 10 competitive telecom executives to watch in 2011

Related articles:
Brian Crotty, Chief Operating Officer, Broadview Networks
Report: Premises-based web-conferencing grew in 2009--driven by UC
Broadview Networks puts cloud services into the SMB's hands

Suggested Articles

The industry was a bit surprised this week when Juniper Networks pulled the trigger on Boston-area startup 128 Technology for $450 million in cash.

Steve Smith has been named as Zayo Group Holding's new CEO while former CEO and founder Dan Caruso transitioned to the position of board director.

On AT&T's third quarter earnings call, AT&T CEO John Stankey reiterated his passion for more fiber, but said AT&T is taking a measured…