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June 29, 2009

FairPoint considers bankruptcy

By Mainebiz News Staff

FairPoint Communications could file for bankruptcy unless its lenders agree to postpone interest payments due on $531 million in loans.

North Carolina-based FairPoint, which last year took over Verizon's landline phone network in Northern New England for $2.3 billion, expects it will not be able to pay the interest due in October, according to a Wednesday filing with the Securities and Exchange Commission. If its debt holders refuse to wait for payment, the company will be forced to restructure, a move that could include bankruptcy.

The filing marks the first time that FairPoint has directly raised the prospect of bankruptcy. The company has asked its lenders to exchange their notes for new loans on an extended repayment schedule. At least 95% of the company's lenders must agree to the offer to avoid restructuring, the filing states.

Fairpoint, which has been plagued with consumer complaints in recent months, earned revenue of $311.6 million in the first quarter, down 2.4% from the fourth quarter of 2008.

 

Reader comments

 

From Joel Goodson (Mon 6/29/2009 10:25 PM)

To be expected, they don't exactly enjoy a stellar reputation in their home state (N.C.) much less north of the mason-dixon.  

From Toni Seger (Mon 6/29/2009 5:15 PM)

The Fairpoint purchase should never have been approved. The PUC was ready to accept an even worse deal than the late revisions agreed to in order to silence complainers like this writer.

No one has been on the public's side in this.

From The Maina! (Mon 6/29/2009 2:00 PM)

I think that A T & T will eventually take over Maine.

They have the power and the land lines to work along with Time Warner Cable and Voice over IP.

GO GO A T & T.

From Aaron D. Osgood (Mon 6/29/2009 1:59 PM)

Unfortunately - it looks like what some have predicted may come true: Verizon couldn't make money up here so sold the whole ball of wax. Now, if Fairpoint goes bankrupt, Verizon will probably swoop in and "save" the enterprise for basically pennies on the dollar, and probably dramatically restructure the employment agreements in the process  

From Diane Newman (Mon 6/29/2009 1:19 PM)

Fairpoint had no business taking over Maine. They do not have the infrastructure to support the clients. I have had nothing but trouble on my lines, hours of telephone holds (one lasting one hour and 52 minutes before they disconnected me) incorrect billing and technicians who do not show up for early morning appointments (2X) I wrote to the Maine Public Utilities Commission twice and have been trying to switch companies for a month now. Even Mid Maine can not get Fairpoint to correct their problems. No surprises here.  

From Nunya B. (Mon 6/29/2009 1:09 PM)

Now come on - who didn't see THIS coming?  

From jimwklein (Mon 6/29/2009 12:45 PM)

I believe this was one on the concerns of some when the deal was orginally put forth. Sad that it may come to be and Maine will suffer another black eye.  

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