Northern New England telecom operator FairPoint Communications filed for Chapter 11 bankruptcy protection, promising to cut $1.7 billion in debt by converting much of it into equity, essentially giving its lenders ownership of the company.
The move comes “barely 18 months after becoming northern New England’s dominant telecommunications company, fulfilling critics’ predictions that the company wasn’t up to the task,” the Associated Press reported.
FairPoint also just invested $85 million in 368 miles of fiber into its core network across Maine, New Hampshire and Vermont. Ouch. I imagine they feel a little like I did after shelling out for a new radiator on my car, only to find there was a transmission leak a month later — but they’re probably much, much more irritated, huh?
The Charlotte, N.C.,-based carrier is best known for its operations in Maine, New Hampshire and Vermont, where it bought Verizon’s wire lines and Internet network for $2.3 billion in 2008. FairPoint sells wire line, broadband, data, Internet and TV in 18 states. The provider also just invested $85 million in 368 miles of fiber into its core network across Maine, New Hampshire and Vermont.
According to the AP, FairPoint has struggled “under a large debt and falling revenues, as well as customer-service, billing and other problems since switching over to its own computer systems in northern New England nine months ago.”
As expected, the company is promising the fallout won’t affect company operations or customer services. Uh-huh.
“The day-to-day operations of our business will not be impacted by today’s actions,” said FairPoint CEO David Hauser. “We want to assure our customers, employees and vendors that we remain committed to continuing to provide reliable, uninterrupted service to all of our customers. Today’s actions represent a critical and positive step in our efforts to reduce our indebtedness, strengthen our financial condition and position FairPoint to compete more effectively in a dynamic marketplace.”