Focal leaves bankruptcy court

Focal Communications officials today said the competitive carrier has completed its restructuring plan after a short six-month stay in bankruptcy court. With a slimmed-down business plan, a healthy balance sheet and even higher revenues than when it entered Chapter 11, the company is well prepared to last the remainder of the telecom downturn, Focal CEO Kathy Perone said today.

“This was not a broken company when we entered bankruptcy,” Perone said. “We were a company with an upside-down balance sheet. We corrected that in bankruptcy court.”

Focal renegotiated its supplier contracts, cut loose its DSL business and canceled voice-over-IP service in its Southeastern markets, but otherwise the company remains the same voice and data carrier serving enterprise, large businesses and carriers in 23 national metro markets. Focal shaved $389 million off of its balance books, leaving it with only $111 million in post-bankruptcy debt. The deals it struck with its creditors effectively eliminated its public-traded stock, turning the company back into a privately held firm.

The company reported positive earnings before interest, taxes, debt and amortization of $7.3 million in the first quarter of 2003.