FairPoint Chapter 11 exit imminent

Independent telco FairPoint Communications confirmed to Connected Planet that it is working on finalizing its emergence from bankruptcy protection by the end of this month, after a bankruptcy court judge in New York City last week approved the company’s recently-revised restructuring plan.

The news comes about 14 months after the company’s Chapter 11 filing. FairPoint initially seemed poised to emerge from bankruptcy last year, but regulators in Vermont rejected the company’s earlier restructuring plan and did not approve a revised version until late December.

Judge Burton Lifland approved a revised plan under which the company’s value upon exit is about $1.5 billion, reportedly about 20 percent lower than originally envisioned. Debt-holding lenders will get to share about 92 percent of the company’s new stock, while the other 8 percent goes to unsecured creditors and bondholders. The most vocal remaining objection to some elements of the plan actually came from Verizon, which was concerned that language in the restructuring plan could limit its legal options if future issues arise.

FairPoint’s emergence from bankruptcy protection also comes almost three years after FairPoint closed its deal to buy nearly 2 million access lines in Maine, New Hampshire and Vermont once owned by Verizon Communications. Vermont regulators also held up approval of the original acquisition back in 2007. Later, in early 2009, FairPoint struggled mightily to integrate and transition the former Verizon properties before filing under Chapter 11 in October 2009.