Frontier winds its way through state utility approvals as part of its Chapter 11 bankruptcy proceedings

Frontier Communications garners the approval of South Carolina's public utilities overseer for its Chapter 11 bankruptcy plan, but its on hold in Connecticut. (Pixabay

Frontier Communications is working its way through a maze of red tape as part of its Chapter 11 bankruptcy proceedings. On Wednesday, the Public Service Commission of South Carolina approved Frontier’s application for the transfer of ownership related to its Chapter 11 filing, but the Public Utilities Regulatory Authority (PURA) in Connecticut delayed its decision on Tuesday.

State utility approvals are required in the 25 states that Frontier provides landline voice services, which, unlike broadband, are a state-regulated public utility. Frontier didn't comment on the approval in South Carolina, but the delay in Connecticut was probably something of surprise since both applications were similar.

According to a story on Wednesday by the Hartford Business Journal, PURA said it wouldn't deny or approve Frontier's restructuring plan because it is not yet "ripe for review." PURA noted that Frontier's bankruptcy plan could change due to its ongoing bankruptcy court case in Delaware. According to the Hartford Business Journal, PURA dismissed Frontier's petition "without prejudice," but said it could file a new petition once its restructuring plan was firmed up.

"Frontier Communications has reviewed PURA’s Interim Decision and the Company disagrees with PURA’s finding to delay review of the Company’s application to approve the organizational changes associated with its Chapter 11 restructuring," said Allison Ellis, senior vice president, regulatory for Frontier Communications, in a statement emailed to FierceTelecom. "Frontier’s Chapter 11 Plan of Reorganization filed with the Bankruptcy Court on May 15th has the support of 75% of the bondholders and only 66 2/3% approval is required for confirmation of the submitted Plan.  

"The Plan is firmly on a path for approval by the Bankruptcy Court without material modification in early August. Frontier will provide additional information to PURA as other Bankruptcy Court milestones are met between now and Court approval of the Plan in August.  In addition, Frontier is committed to expeditiously addressing the Commission’s questions so that Frontier can emerge from the Chapter 11 process as soon as possible.”

RELATED: Frontier Communications drops into Chapter 11 bankruptcy

Frontier's bankruptcy plan, which was announced in April, includes converting senior notes into equity common stock as part of an effort to eliminate $10 billion debt. Overall, Frontier has a $17.5 billion debt load.

Frontier also announced in April that it had secured $460 million in debtor-in-possession financing that, combined with on hand cash, gave it more than $1.1 billion in liquidly as it continues offering its services to its customers. Frontier offers internet, TV and phone services to business and residential customers across 29 states.

Last month, U.S. Bankruptcy Judge Robert Drain signed off on $37.7 million in bonuses for Frontier Communications' executives as the telco works its way through Chapter 11 bankruptcy.

RELATED: Windstream Holdings targets late August for end of Chapter 11 bankruptcy

Frontier filed for bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York, and its filing is presided over by Judge Drain. Judge Drain has also overseen Windstream Holdings' Chapter 11 bankruptcy proceeding.

After running its own gauntlet of federal and state approvals, Windstream is targeting late August to emerge from its own Chapter 11 bankruptcy, which was filed early last year, once it gains regulatory approvals. The court the will hold a confirmation hearing on Windstream's reorganization plan on June 24.