FairPoint holds off creditors for a month
FairPoint Communications has another month to avoid bankruptcy court thanks to a deal reached with its lenders.
The North Carolina-based company has entered into an agreement with lenders that together hold more than 50% of its outstanding debt, the Associated Press reported. If FairPoint defaults on principal and interest payments totaling $42 million due tomorrow, which the company said is likely, its lenders have agreed not to take action until Oct. 30. FairPoint said it will use the month of October to work with lenders to develop a restructuring plan for nearly $2 billion in debt, but warned that such a plan may require it to file for Chapter 11 protection, according to the Concord Monitor.
FairPoint, which has been plagued by delayed orders and customer service problems since buying Verizon's landline and Internet business in northern New England last year for $2.3 billion, promised that services would not be affected by the restructuring or a potential bankruptcy filing, MPBN reported. In July, the company asked bondholders to extend interest payments.
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