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FairPoint to ask Vt. to reconsider bankruptcy plan

Tue, 08/10/2010 - 8:00am
Dave Gram, The Associated Press

MONTPELIER, Vt. (AP) – FairPoint Communications will submit more information to Vermont regulators in hopes of getting them to reverse a previous decision and approve the company's plan to emerge from bankruptcy, a FairPoint executive said.

The Vermont Public Service Board in June rejected the plan, under which the company would emerge from bankruptcy by the end of summer. The board said it was not convinced FairPoint had made significant improvement.

The company last week said it might try to get a federal bankruptcy court in New York to effectively overturn the June 28 board decision. FairPoint said it was also weighing another option: approaching the Vermont board again with new information about the company's finances.

Michael Smith, FairPoint's Vermont president, on Monday indicated the company is taking the more conciliatory approach for now.

"I feel that this is the Vermont way, to try to work it out in Vermont," Smith said. "We still reserve the right to go back to the federal bankruptcy court should this ruling be ... different from our expectations."

Smith said FairPoint has obtained approval from the 17 other states where it operates, including New Hampshire and Maine. The company also has approval from labor unions and creditors, he said. Vermont is the only holdout.

Susan Hudson, the board clerk, said the board would review the information once the company submits it.

David O'Brien, commissioner of the Department of Public Service, which represents ratepayers before the board, did not immediately return a phone call seeking comment.

In its June decision, the board used sharp language in rejecting the plan.

The board said FairPoint was improving the quality of its services from very low levels after it took over the northern New England phone network from Verizon Communications early last year. But those improvements were put in jeopardy by the company's shaky finances, the board said.

"FairPoint bears the burden of demonstrating either that its assumptions are reasonable or that it will be financially sound over a range of reasonable assumptions. It has not done so. FairPoint has provided virtually no explanation as to why its projections are reasonable," the board said.

But the board also said the Charlotte, N.C.-based company could try again.

"Although we cannot grant the approvals based upon the evidence before us, we would welcome a new proposal that addresses our concerns," the board said.

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