FairPoint Announces Chapter 11 - Wall Street v Main Street?

by: Maggie Gundersen

Mon Oct 26, 2009 at 12:58:11 PM EDT

FairPoint has Reached an Agreement with its Bank Lenders that will Restructure its Costs and Balance Sheet

As a leading provider of a full range of communications services, FairPoint Communications provides local and long distance voice, data service, Internet, television and broadband services. FairPoint operates 32 local exchange companies in 18 states with 1.7 million access lines. Like many companies, FairPoint has been impacted by the recent turmoil in the financial markets. As we have shared with many of our stakeholders, we have been working with our bank lenders to reduce our debt. We are pleased to announce FairPoint has succeeded in reaching a pre-arranged deal with our bank lenders that will reduce our debt in excess of $1.7 billion. We have entered Chapter 11 to implement this deal and restructure our costs and balance sheet. This is good news and we are confident that FairPoint will emerge as a much healthier and more viable company structured for future growth and profitability.  

To read the FairPoint's entire announcement, click http://www.fprestructuring.com/.

The International Brotherhood of Electrical Workers (IBEW) and Communication Workers of America (CWA) announced Friday that FairPoint was on the brink of bankruptcy.  

As the unions have consistently maintained, FairPoint's problems were caused primarily by its crushing debt and an organizational chaos that adversely affected revenues and operations.  Despite waging an all out campaign to oppose the sale, thousands of former Verizon workers have spent the last year-and-a-half working to make their new company succeed.