As expected, FairPoint Communications (Other OTC: FRCMQ.PK) has finally completed its restructuring process and emerged from Chapter 11 bankruptcy protection.
Through this restructuring process, FairPoint cut its outstanding debt by about 64 percent, down from the $2.8 billion to about $1 billion. The service provider also now has a $75 million revolving credit facility for working capital and general corporate purposes.
Despite concerns over reaching its broadband roll out goals in New England, FairPoint said that it had made progress in expanding the availability of broadband service and has completed its VantagePoint core network build in northern New England.
Part of FairPoint's restructuring also included the appointment of a new Board of Directors. FairPoint's new board includes Edward D. Horowitz (chairman), Todd Arden, Dennis J. Austin, Michael J. Mahoney, Michael K. Robinson, FairPoint's new CEO Paul Sunu, David Treadwell and Wayne Wilson.
During a hearing on Jan. 13, the U.S. Bankruptcy Court for the Southern District of New York confirmed the service provider's reorganization plan. Likewise, the Public Utilities Commissions in all required states in which FairPoint provides services also approved the restructuring package.
The story of FairPoint's bankruptcy, which came after the company struggled to integrate Verizon's former New England phone lines, is not an isolated incident. Fellow telco Hawaiian Telcom, which also bought out Verizon's lines in Hawaii, also was driven to Chapter 11 restructuring but reemerged in October last year.
While it will take time to see how successful both FairPoint and Hawaiian Telcom will be in life after restructuring, the two companies experiences should serve as a cautionary tale for any telco conducting a large scale acquisition of another major carrier's network infrastructure.
- see the release
FairPoint realigns restructuring plan, hearing scheduled for Jan. 13
FairPoint's Chapter 11 plan gets support from creditors, lenders
Judge approves FairPoint's reorganization plan
FairPoint wants extension for broadband expansion
FairPoint buys more time for reorganization
FairPoint will have to restate 2009 revenue
FairPoint files for Chapter 11 bankruptcy protection