Frontier Communications filed for Bankruptcy today. The full story is posted below, BUT this DOES NOT mean that your phone or Internet service will face any immediate interruption. That would not be allowed by the Bankruptcy judge. It DOES mean that Frontier will be restructuring its operations under the direction and approval of the Court. Their labor agreements will be voided and there may well be layoffs, sale of assets, and creditors and other interested parties can object or agree to their restructuring plans. This will take months, but not likely years since they have been in discussions with the creditors and publicly announced their intention several months ago.
The bondholders who are owed Billions will, after discharge from Bankruptcy, have full control of the company going forward. They will control all the shares in the new company when Frontier exits control by the court. This is not a big change since they control the Board of Directors now, and selected the new CEO.
In short no worries immediately. We will find out more in the coming months as they have to file their plans publicly to the court. We will keep you posted.
(Reuters) – Frontier Communications Corp has filed for bankruptcy protection in the United States, the high-speed internet company said on Tuesday, as it restructures finances to cut down its borrowings by more than $10 billion.
The company, which warned on its ability to continue as a going concern last month, had been in discussions with some of its lenders and was also mulling restructuring options.
Frontier said it has entered an agreement with its bondholders and received $460 million in debtor-in-possession financing.
“With this agreement with our bondholders, we can now focus on executing our strategy to drive operational efficiencies and position our business for long-term growth,” President and Chief Executive Officer Bernie Han said.
The Norwalk, Connecticut-based company estimated its assets and liabilities both in the range of $10 billion to $50 billion, according to a filing in the U.S. Bankruptcy Court for the Southern District of New York.
Frontier also said it would continue with the sale process of its operations and assets in Washington, Oregon, Idaho, and Montana to Northwest Fiber, and will also continue services and paying its vendors.