FairPoint emerges from bankruptcy, debt only $1B
PORTLAND, Maine (AP) – Telecommunications company FairPoint Communications Inc. emerged from bankruptcy reorganization Monday, nearly 15 months after filing for Chapter 11 with a crushing debt load and a battered financial sheet.
FairPoint, based in Charlotte, N.C., said its reorganization plan, which became effective 11 days after being approved by the U.S. Bankruptcy Court for the southern district of New York, reduces its debt from $2.8 billion to about $1 billion. It said the plan also results in a $75 million credit line.
"We are emerging as a stronger company, focused on our customers, vendors and employees," Paul Sunu, FairPoint's chief executive officer, said in a statement.
FairPoint owns telephone companies in 18 states. It filed for bankruptcy on Oct. 26, 2009, barely 18 months after buying Verizon's northern New England landline telephone and Internet operations for $2.3 billion.
Its largest holdings by far are in Maine, New Hampshire and Vermont, where it has nearly 3,500 employees. Of its 1.6 million access lines, more than 1.3 million are in northern New England.
The company grew sixfold overnight when it bought Verizon's land holdings, and many skeptics of the sale predicted the company would experience difficulties.
The troubles mounted with the nation's credit crisis and a bungled technology transfer that savaged FairPoint's finances and reputation.
For the bankruptcy reorganization, FairPoint negotiated with banks and bondholders to restructure its debt while also asking its union employees for concessions as a cost-cutting move.
One union boss said the unions had been "instrumental" in allowing the company to emerge from bankruptcy.
"I believe that we've done everything in our realm that we could do to allow them to get out of Chapter 11," said Don Trementozzi, president of the Communication Workers of America Local 1400 in Portsmouth, N.H., which represents 450 workers in Maine, New Hampshire and Vermont.
The International Brotherhood of Electrical Workers will continue to try to find ways to save money to help bolster the company's bottom line, said Pete McLaughlin, of Augusta, Maine, who serves as chairman of an IBEW council that represents 2,000 workers in the three states.
When the company filed for bankruptcy, the New York Stock Exchange suspended trading of its stock. The old common stock, which until recently traded over the counter, has been canceled and does not convert into new common stock.
FairPoint said it has received approval to list its stock on the Nasdaq stock exchange under the ticker symbol FRP. Trading is expected to start shortly, but a date has not been set, the company said.