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Deadline given for Windstream plan

by Andrew Moreau | December 19, 2019 at 1:57 a.m.

A federal judge on Wednesday rejected Windstream Holdings Inc.'s request to wait until May 31 to submit an action plan to get the company out of bankruptcy.

Instead, U.S. Bankruptcy Judge Robert Drain set an April deadline for the filing and urged the Little Rock company to settle a leasing dispute with Uniti Group, also based in Little Rock. The ruling was more favorable to creditors' requests that the plan be filed in March or April as opposed to submitting it in the summer.

The judge did not set a firm date for Windstream to file the plan in April.

Windstream said it would be willing to reopen negotiations with Uniti over the leasing dispute, but a spokesman did not say whether Windstream would make the first move. "We remain open to the possibility of a potential consensual resolution of issues with Uniti," said spokesman David Avery, who added that any mediation efforts would be confidential and not subject to comment.

Earlier this month, Uniti filed a document indicating it is ready to talk again. "Uniti remains ready, willing and able to continue negotiations with Windstream," the filing said.

The companies were conducting supervised mediation efforts that broke off in November.

Chapter 11 bankruptcy code grants Windstream an exclusive period to file an action plan that outlines its restructuring, both on financial and operational issues. Once the plan is filed, the company is given two months to gain approval from creditors and other parties involved in the case.

The deadline to file a restructuring plan is this month, and Windstream initially asked to extend the deadline to August.

Company officials stressed that Windstream is working on a plan to emerge from bankruptcy. "Windstream has made significant progress toward a successful restructuring and will continue to work swiftly for an efficient emergence," Avery said.

It's been a week of whipsaw filings in the case.

On Monday, major creditors in separate filings responded that an August deadline was too generous, and several recommended giving the company until March to file the action plan. One creditor recommended a mid-April filing.

On Tuesday, Windstream amended its original request and suggested May 31 as the deadline to file the action plan. "Shorter just doesn't work here," Brad Weiland, the attorney representing Windstream, told the judge Wednesday, according to a Bloomberg News report.

During the summer, Windstream sued Uniti over a $650 million payment that Windstream makes annually to lease copper and fiber lines from Uniti. The arrangement provides network access that Windstream needs to deliver services to most of its customers across the nation.

The companies had been in negotiations to settle the dispute but broke off talks in November. A trial is scheduled for March 2-6.

Windstream contends it cannot reasonably put together a business plan until the Uniti dispute is cleared up. The company said it will need time after the trial to submit a workable plan.

Its filing Tuesday noted that "irrespective of the outcome of the Uniti trial, [Windstream] must be afforded an appropriate opportunity after trial to formulate and prosecute a Chapter 11 plan."

A major creditor in the case, UMB Bank, said in filings that Windstream is "hemorrhaging cash" and should not be given a lengthy amount of time to file a business plan.

The bank said the monthly payment of about $55 million that Windstream is making to Uniti is more than double what it should be for fiber access. The bank estimates the monthly charge should be in the $22 million-$25 million range.

Windstream's statement Wednesday reiterated the importance of resolving the Uniti dispute before a viable business plan can be presented to creditors and to the judge.

"We are pleased the judge agreed an extension is appropriate while the Uniti litigation proceeds to trial," Avery said. "An extension to April is welcome because it suggests a swift trial ruling from the judge."

Windstream provides communications services to customers in 18 states and has more than 11,000 employees.

Business on 12/19/2019

Print Headline: Deadline given for Windstream plan


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