FairPoint Communications voluntarily files for Ch. 11 bankruptcy protection

Monday, October 26, 2009

FairPoint voluntarily files for Ch. 11 protection

CHARLOTTE, N.C. — Telecommunications services provider FairPoint Communications Inc. said Monday it has filed for Chapter 11 bankruptcy protection after agreeing on a deal with key lenders that will help lower its debt by $1.7 billion.

Charlotte, N.C. Fairpoint said the restructuring plan with lenders holding more than half of its outstanding secured debt is subject to bankruptcy court approval.

The company said it expects to continue operating as normal while awaiting that approval. Last week, the governors of Maine, New Hampshire and Vermont said they want assurances from FairPoint that any debt restructuring by the company won’t further erode customer service.

FairPoint owns and operates phone companies in 18 states with a total of 1.65 million lines, but its largest holdings are in Maine, New Hampshire and Vermont. The company, which bought Verizon’s land lines and Internet services for $2.3 billion in 2008, has been plagued with customer service and operational problems in those regions.

FairPoint said Monday it has about $46 million of cash on hand and expects to continue to generate positive operating cash flow.

Alfred Giammarino, chief financial officer and executive vice president, said the company is pleased with the terms of the agreement it reached with its lenders.

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