sunny.png
Wednesday March 20th, 2019 7:46PM

Windstream Holdings Inc. files for Chapter 11 bankruptcy reorganization

By Rob Moore Reporter

Windstream Holdings Inc. announced Monday the company and all its subsidiaries have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code.

The filing comes less than 10 days after a federal court judge ruled the 2015 spinoff of fiber and copper assets into a separate company violated bond covenants, opening the door for a $310-million judgment.

In a news release issued Monday, Windstream Holdings Inc. President and Chief Executive Officer Tony Thomas said the reorganization is necessary.

The Little Rock, Ark.-based company intends to use the court-supervised process to address debt maturities that have been accelerated as a result of the recent decision by Judge Jesse Furman in the Southern District of New York against Windstream Services LLC, a subsidiary of the company, according to Monday’s release.

“Following a comprehensive review of our options, including an appeal, the Board of Directors and management team determined that filing for voluntary Chapter 11 protection is a necessary step to address the financial impact of Judge Furman’s decision and the impact it would have on consumers and businesses across the states in which we operate,” Thomas said. “Taking this proactive step will ensure that Windstream has access to the capital and resources we need to continue building on Windstream’s strong operational momentum while we engage in constructive discussions with our creditors regarding the terms of a consensual plan of reorganization. We acted decisively to secure the long-term financial stability of Windstream, and we are confident that, upon completion of the reorganization process, we will be even better positioned to invest in our business, expand our speed and capabilities for our customers and compete for the long term.”
According to Thomas, court approval of a reorganization plan will enable to company to continue paying its 13,000 employees while maintaining relationships with its partners and customers.

“I want to express my appreciation for the continued focus of the entire Windstream team as well as the loyalty and patience of our customers, vendors, channel partners and other stakeholders,” continued Thomas. “We remain committed to providing critical voice and data services and ensuring customers realize the maximum benefit in transitioning to next-generation technology solutions and premium broadband services.”

Windstream has received a commitment from Citigroup Global Markets Inc. for $1 billion in debtor-in-possession (“DIP”) financing, the release states. Following approval by the court, that financing, combined with access to the cash generated by the company’s ongoing operations, will be available to meet Windstream’s operational needs and continue operating its business as usual.

In conjunction with the filing, Windstream has filed numerous customary first-day motions. Those motions allow the company to continue to operate in the normal course of business without interruption or disruption to its relationships with its customers, vendors, channel partners and employees. The company expects to receive court approval for these requests and intends to pay vendors in full for all goods received and services provided to Windstream after the filing date.

Furman’s ruling was in a lawsuit brought by Aurelius Capital Management of New York, that alleged that Windstream’s 2015 spinoff of its copper and fiber assets into a real estate investment trust (REIT) known as Uniti Group Inc. of Little Rock (originally called Communication Sales & Leasing Inc.) violated the terms of some of its outstanding bonds.

“Windstream strongly disagrees with Judge Furman’s decision,” Thomas said. “The company believes that Aurelius engaged in predatory market manipulation to advance its own financial position through credit default swaps at the expense of many thousands of shareholders, lenders, employees, customers, vendors and business partners. Windstream stands by its decision to defend itself and try to block Aurelius’ tactics in court. The time is well past for regulators to carefully examine the ramifications of an unregulated credit default swap marketplace.”

Thomas’ statement asserts that Windstream failures did not prompt the Chapter 11 filings.

“Windstream did not arrive in Chapter 11 due to operational failures and currently does not anticipate the need to restructure material operations,” Thomas said. “While it is unfortunate that Aurelius engaged in these tactics to advance its returns at the expense of Windstream, we look forward to working through the financial restructuring process to secure a sustainable capital structure so we can maintain our strong operational performance and continue serving our customers for many years to come.”

Windstream serves telephone, broadband and entertainment services customers in primarily rural areas in 18 states.

Additional information about Windstream’s filings can be viewed on the company’s restructuring website at www.windstreamrestructuring.com.

Court filings and other documents related to the Chapter 11 process are located at www.kccllc.net/windstream, a website administered by Windstream’s claims agent, Kurtzman Carson Consultants LLC.

© Copyright 2019 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.