Welcome to the Business Journal Archives
Search for articles below, or continue to the all new BusinessJournalDaily.com now.
Search
Choice One Communications to Exit Chapter 11 Bankruptcy
"ROCHESTER, N.Y. -- Following bankruptcy court approval of its "prepackaged" financial restructuring plan, Choice One Communications expects to emerge from Chapter 11 bankruptcy protection about Nov. 18, officials announced earlier today. The integrated communications provider, which has operations in the Youngstown area, will exit bankruptcy with $30 million of new financing and debt that has been reduced to approximately $205 million from more than $1 billion. Reflecting the fundamental strength of its operations and its future growth and earnings potential, Choice One's Plan of Reorganization was accepted by 100% of its lenders prior to the company's voluntary Chapter 11 filing on Oct. 5. Under the Plan of Reorganization, which was confirmed by the U.S. Bankruptcy Court for the Southern District of New York following a hearing on Nov. 8, Choice One will convert approximately $404 million of outstanding senior debt into $175 million of new senior secured term notes with a six-year term and 90% of the common stock of the reorganized company; convert approximately $252 million of outstanding subordinated debt into the other 10% of such common stock and into two series of seven-year warrants to purchase additional shares of common stock from the reorganized company; and upon completion of the restructuring, obtain a revolving credit facility of $30 million from a subset of its existing lenders to provide for ongoing working capital requirements. "We are pleased that the Court has confirmed our Plan of Reorganization, an important milestone that keeps us on track to execute our 'prepackaged' financial restructuring as planned in less than 45 days from start to finish," said Steve Dubnik, chairman and chief executive officer. "I am excited to report that our business has continued to grow during this time and we are grateful to our colleagues, clients, lenders and suppliers, whose support has allowed us to move through the reorganization process very quickly, efficiently and effectively. Our ability to achieve such a significant financial restructuring in less than two months is virtually unprecedented in our industry and will leave Choice One well positioned to capitalize on future growth opportunities." Choice one serves businesses in 29 metropolitan markets throughout 12 Northeast and Midwest states. The company reported $323 million of revenue in 2003, has more than 100,000 clients and employs approximately 1,200. Visit Choice One Communications Inc.: www.choiceone.com "