Burlington Telecom’s sale to Schurz gets city council approval

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Burlington City Council approved the sale of Burlington Telecom to Schurz Communications. (Getty/DenisTangneyJr)

Burlington Telecom’s sale saga took another turn this week as the city council approved a deal with Indiana-based Schurz Communications to take over the troubled Vermont-based service provider.

During a special meeting on Wednesday night, the Burlington City Council signed a 61-page agreement to transfer Burlington Telecom’s ownership to Schurz Communications.

The 10-2 vote, according to a VT Digger report, marked the last major decision the city council has to make in finalizing the Burlington Telecom sale process.

RELATED: Ting, Keep BT Local become finalists in battle for Vermont’s Burlington Telecom

However, the sale process still needs to get the Public Utilities Commission’s (PUC) approval, which has to certify the acquisition by granting a Certificate of Public Good. After granting the Certificate of Public Good, the Burlington City Council will finalize the deal again

Getting to this point has been anything but easy. Former council members were present in 2011 when reports revealed that then-mayor Bob Kiss had been supporting the struggling Burlington Telecom with $17 million in city funds.

In 2014, Burlington Telecom tried to settle the $33.5 million lawsuit with Citibank, one of its key investors, for $10.5 million.

“We were, literally months away from trial in federal district court, facing a $30 million claim for breach of contract, fraud, and a legitimate, very legitimate claim for taking the assets back from Citibank,” said former Burlington Councilor Chip Mason, D-Ward 5.

Citibank’s lawsuit against Burlington came to a close after a settlement was established to leverage financing from Blue Water Holdings, one of Burlington Telecom’s owners, which leases its assets to the city.

Under the terms of the agreement with Blue Water, the city had to sell Burlington Telecom by the end of the year. If the sale was not completed, the city would not be able to get a piece of the proceeds.

While Schurz is the winning suitor for the Burlington Telecom assets, the service provider has to follow a performance order

“We have the ability to bring them into court, and have a judge order that they do what they say they are going to do,” said Ralphine O’Rourke, an attorney retained by the city to help with the Burlington Telecom sale, according to the VT Digger article.

Schurz, which was initially eliminated from the sale process after only getting one vote in October, was just one of several companies that made a bid on Burlington Telecom. Other providers that had put in bids to purchase the service provider, included Keep BT Local, the local cooperative that wants to purchase Burlington Telecom, and Tucows/Ting.