FairPoint Files for Bankruptcy

Fairpoint Communications announced today that it has voluntarily filed for Chapter 11 bankruptcy protection.

Based in Charlotte, N.C., FairPoint owns and operates phone companies in 18 states with a total of 1.65 million lines. Its largest holdings are in Maine, New Hampshire and Vermont. In fact, FairPoint purchased Verizon Communications’ landline and Internet operations in those three states just 18 months ago. At the time critics were skeptical about Fairpoint’s ability to weather the economic storm, and successfully complete the technology transfer from Verzion’s systems to its own. Indeed FairPoint has been plagued with customer-service, order-fulfillment and billing problems, resulting in increased costs and a shrinking customer base.

Fairpoint has agreed on a deal with key lenders that will lower its debt from $2.7 billion to $1 billion and significantly cut its interest expenses, but the plan is subject to approval by the U.S. Bankruptcy Court in the Southern District of New York.

“The day-to-day operations of our business will not be impacted by today’s actions,” said David Hauser, Chairman and CEO of FairPoint. “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.”

Related posts:

1. Blockbuster Files for Bankruptcy
2. Fairpoint Applies for $37M in Stimulus Funds
3. Skype Files for IPO
4. ACA Files Petition to Deny at the FCC
5. Ohio PUC Suspends Verizon-Frontier Deal