FairPoint (Other OTC: FRCMQ.PK) wants Vermont's telecom regulators to take another look at its financial reorganization plan. In June, the Vermont Public Service Board rejected FairPoint's plan to emerge from bankruptcy because it was not convinced the ILEC had the financial wherewithal to move forward.
This prompted FairPoint to consider two courses of action: ask the federal bankruptcy court in New York to overturn the Vermont PSB's decision or submit a revised plan to the board.
It appears that FairPoint would rather work with the Vermont PSB to find a mutually agreeable solution by submitting more information about its financial situation. "I feel that this is the Vermont way, to try to work it out in Vermont," said Michael Smith, FairPoint's Vermont president. "We still reserve the right to go back to the federal bankruptcy court should this ruling be ... different from our expectations."
To date, the 17 other states where FairPoint operates, including its two other New England territories Maine and New Hampshire, have approved its plan. In addition, labor unions and creditors approved the plan. VermontVermont, which previously considered revoking the ILEC's license to operate in its state, is the only state that has rejected FairPoint's reorganization plan.
Although the Vermont PSB recognized FairPoint's efforts to improve service quality on the New England phone systems it purchased from Verizon (NYSE: VZ), it questioned its financial state.
"FairPoint bears the burden of demonstrating either that its assumptions are reasonable or that it will be financially sound over a range of reasonable assumptions. It has not done so. FairPoint has provided virtually no explanation as to why its projections are reasonable," the board said.
- Bloomberg has this story
Vermont PSB won't accept FairPoint's bankruptcy plan
Maine PUC approves FairPoint's reorganization plan
FairPoint's Vermont network problems continue to swell
FairPoint wants extension for broadband expansion
FairPoint files for Chapter 11 bankruptcy protection