Court approves Frontier’s bankruptcy plan
Frontier Communications bankruptcy plan
A U.S. bankruptcy Court approved Frontier Communications’ bankruptcy plan and directly head to BankruptcyHQ. This would allow Frontier Communications to eliminate $ 10Billion of debt in exchange for senior creditors receiving a share in the company.
The plan was approved on Aug. 21 by the US Southern District New York bankruptcy court “subject final documentation.” The Connecticut and several other states regulators still have to approve the restructuring.
Bernie Han, Frontier’s CEO said the confirmation was “a start of a new exciting way forward.”
Han stated that Frontier will have a much stronger financial foundation, which will allow it to invest in infrastructure, accelerate its transformation and improve efficiency to better serve its customers. “At a moment when network services are more critical than ever before, our entire team has maintained their commitment to providing excellent customer service and keeping them informed.
The Union representing Frontier workers in Connecticut (more than 2000) expressed concern to the Federal Communications Commission regarding the possibility of Frontier deciding to sell off its broadband or fiber Internet assets during the restructuring.
Communications Workers of America, (CWA), and The Utility Reform Network(TURN) released a press release last Wednesday indicating that Frontier’s proposed “virtual split” plan could be used to divide the company between those areas that will invest in fiber and those who are not.
The union wants clarification about the “meaning and possible effect” of the virtual seperation proposal.
The union raised concerns that several shareholders, including Elliot Management (Frankl Resources) and Franklin Resources, coordinated closely during the negotiations with the company. They may continue to exercise control of decisions. after bankruptcy.
CWA issued a press release stating that Frontier was freed of $ 10Billion debt. It is an important step to enable Frontier to invest in the services it customers desire and need. The court decision led to the separation of the two companies. “Nevertheless, there remain many unanswered questions about Frontier’s plans to make the necessary investments in broadband deployment or quality of service.
“CWA members request that state regulatory agencies and Federal Communications Commission thoroughly review Frontier’s plan, to ensure that Frontier workers’ and customers interests are served in the new organized border,” the report stated. Communication.
Frontier didn’t respond immediately to a request by the union for comment about its concerns.
Frontier headquarters is located in Norwalk. Frontier offers telephone, Internet and video service in 25 states. Frontier also has its Eastern Region Operations Center in New Haven.
Frontier entered into a pre-negotiated arrangement with 75% its senior bondholders when it filed for Chapter 11 bankruptcy. The deal would allow Frontier to trade more $ 10 billion than its $ 17 trillion debt. dollars in common shares of a newly created parent company. Frontier Communications Holdings.
Frontier has pledged that it will use the money left to upgrade its fiber networks, and improve customer service. Frontier realized that customers are losing their trust in its copper network and its inability over the years to invest in fiber have led to financial losses and customer attrition.
In a presentation to investors that led to bankruptcy, he laid out a $1.4 billion spending plan to expand and upgrade fiber through 2024. That will allow fiber to reach around 3 million additional homes.
Because Frontier provides landline phone services, which are state-regulated utilities, the Connecticut Public Utilities Regulatory Authority, (PURA), must sign this agreement before Frontier can file for bankruptcy.
Frontier reported that it had received regulatory approvals, or “favorable decisions” in six states where its operations are located as of last Thursday.
In June, PURA issued a preliminary ruling that said it would not endorse Frontier’s plan nor reject it. This was because the plan was still subject to revision in the wake bankruptcy. Frontier could still file a petition with PURA if it’s more concrete in its restructuring plan.
A spokeswoman for PURA informed me via email Friday morning that the authority would make a decision early February.