Windstream Holdings Inc., a Little Rock-based rural telecommunications company with customers in Northeast Georgia, filed for Chapter 11 bankruptcy on Monday, Feb. 25.
Tony Thomas, the president and CEO of Windstream, said in a press release that the company’s board of directors and management team decided to file for Chapter 11 as a result of the impact of Judge Jesse Furman’s decision.
Furman ruled on Feb. 15 that Windstream Services LLC — a subsidiary of the company — broke its agreement with bondholders.
The ruling was in favor of Aurelius Capital Management, a bondholder with Windstream, who accused the company of this violation.
“Windstream strongly disagrees with Judge Furman’s decision,” Thomas said in the release. “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.”
Thomas said that filing for voluntary Chapter 11 protection will ensure that Windstream has access to the capital and resources it needs to continue its strong operational momentum.
“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,” Thomas said in a press release.
If the U.S. Bankruptcy Court for the Southern District of New York provides its approval for the filing, Thomas said Windstream will continue paying its employees, maintaining its relationships with vendors and business partners, and serving its customers.
“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,” he said.
The release disclosed that Windstream received a debtor-in-possession financing commitment from Citigroup Global Markets Inc. for $1 billion. If the court gives its authorization, this financing and the money from the company’s operations will help Windstream continue running as usual.
Thomas said in the release that Windstream didn’t arrive at Chapter 11 bankruptcy because of operation failures, and doesn’t anticipate needing to restructure its material operations.
Windstream has been the subject of complaints throughout Northeast Georgia. In 2016 the struggle with the company resulted in Jefferson City Council in Jackson County starting a Broadband Advisory Committee to consider alternative service providers.
Prompted by people’s concerns, Republican U.S. Rep. Doug Collins reached out to the Windstream in February 2016. He wrote a letter addressing the inconsistent internet service in homes and businesses throughout Georgia’s 9th District. Collins urged Windstream to provide a solution to this issue.
In Oct. 2016 Windstream announced plans to upgrade its broadband internet services in Northeast Georgia counties.
For more details about Windstream's filing for bankruptcy visit www.windstreamrestructuring.com.
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