Windstream announced yesterday that the U.S. Bankruptcy Court of the Southern District of New York has granted the carrier “first day” motions during the Windstream chapter 11 restructuring. As a result, Windstream can proceed with normal business operations while in reorganization.
Notably, the court is allowing Windstream to access $400 million of its $1 billion debtor-in-possession (DIP) financing. Windstream reports that access to this DIP financing in combination with the cash generated from its operations will allow the carrier to proceed with business as usual.
Windstream filed for Chapter 11 bankruptcy on February 25th as a result of losing a lawsuit brought by Windstream bondholder Aurelius. That decision obligated Windstream to a $310 million payment plus interest and opened the company to similar investor lawsuits. Rather than appeal the decision, Windstream chose, in rather quick fashion, to file for Chapter 11 bankruptcy.
“We are pleased to have received approval of our First Day motions, which will enable Windstream to continue normal business operations as we continue paying our employees, maintaining our relationships with our vendors and business partners and serving our customers as usual,” said Tony Thomas, president and chief executive officer, in a prepared statement. “Our focus going forward is on serving our customers and maintaining the strong operational momentum we are seeing across our business.”
The ruling gives Windstream the ability to “… among other things, operate in the normal course of business without interruption or disruption to its relationships with its customers, vendors, channel partners and employees.”
Windstream says it intends to pay its vendors in full for all goods and services provided to the company after the February 25th filing date. A Windstream Chapter 11 restructuring website has been established to provide resources and information regarding the restructure at www.windstreamrestructuring.com.
