Frontier’s bankruptcy plan was approved by the US Southern District of New York bankruptcy court on Friday “subject to final documentation.”
After filing for Chapter 11 bankruptcy in April, Frontier said it had obtained regulatory approvals, or favorable rulings, from six of the 25 states in its footprint. Frontier also still needs FCC approval before it can re-emerge from Chapter 11 bankruptcy. To date, Frontier has not specified when it expects to complete its bankruptcy proceedings.
Frontier Communications filed for bankruptcy on April 14 to launch a pre-arranged $ 10 billion debt reduction proposal backed by its major bondholders. Frontier said it has entered into a Restructuring Support Agreement (RSA) with bondholders representing more than 75% of its $ 11 billion outstanding unsecured bonds. Frontier’s goal was to reduce its debt by more than $ 10 billion.
“Today’s confirmation marks the start of an exciting new way forward at Frontier,” Frontier President and CEO Bernie Han said in a statement. “With a significantly stronger financial base, Frontier will be well positioned to accelerate our transformation, invest in infrastructure and increase efficiency to better serve our customers. At a time when our network services have never been more needed, our entire team has remained steadfast in their commitment to serving our customers, ensuring they are connected and informed. For the future, we have a strong vision, one where we will win in the current competitive environment and create a better customer experience. “
Ahead of Friday’s approval, the Communications Workers of America, which represents 8,000 Frontier employees, and a consumer advocacy group (TURN) filed comments with the FCC on Thursday that raised concerns that Frontier could segregate its assets. fiber, among others, as part of its restructuring plan.
CWA and TURN raised red flags with the FCC that some of the shareholders were trying to part with the most profitable fiber assets as part of a “virtual separation” plan.
The letter to the FCC said separating Frontier’s fiber assets from its traditional copper-based assets would result in upgrades in the former, but not in the latter. The CWA and TURN acknowledged in their letter to the FCC that the “virtual separation” mentioned in Frontier’s amended fourth plan was not clearly defined, “but could result in significant changes in Frontier’s operations.”
“This appears to refer to a separation of Frontier’s fiber optic deployment from its non-fiber operations, possibly including the provision of retail services such as broadband and routine operations in ‘legacy’ areas or copper from the company, ”CWA and TURN said in their letter. to the FCC. “CWA and TURN are concerned that ‘virtual separation’ could affect the quality and reliability of service received by Frontier customers, as well as Frontier’s ability to meet the Commission’s broadband targets.
“To better understand this term and its effect on Frontier’s operations and customers, CWA and TURN believe that it would be necessary for the Board to consider numerous documents that have not been filed with the Board.”
A spokesperson for CWA said on Monday that the union still did not know what Frontier’s virtual separation plan meant.
“We call on the FCC and state PUCs to investigate to find out the meaning and effect,” CWA’s Beth Allen said in an emailed statement to FierceTelecom.
Frontier has also not said what the virtual separation means, but spokesman Javier Mendoza said in an email to FierceTelecom on Monday that “the documents speak for themselves.”
The Nasdaq suspended trading of Frontier common stock when markets opened on April 24. The stock was officially delisted from the Nasdaq on May 11.