Frontier Considering Chapter 11 Filing to Stave Off Debt Payments?


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Sources tell Bloomberg that Frontier Communications Corp. is negotiating with creditors before $356 million of debt payments come due March 15. They say the telecom is asking creditors to help put together a turnaround deal that would involve filing for Chapter 11 bankruptcy in mid-March. Frontier provides telecom services in 29 states. 

Company executives including Bernie Han, Frontier’s new chief executive officer, met with creditors and advisers Thursday and told them the company wants to negotiate a pre-packaged agreement, reported Bloomberg. Certain Frontier creditors signed confidentiality documents that restrict their ability to trade in preparation for the negotiations, the sources said.  

A representative for Frontier declined to comment. A Chapter 11 bankruptcy typically allows a company to keep operating. In this case, such a deal could allow the telecom to continue providing phone and broadband services without interruption.

Frontier is in the process of selling its Northwest assets, broadband services in Washington, Oregon, Idaho and Montana, to Kirkland-based WaveDivision Capital for $1.36 billion. The deal is making its way through the state and federal regulatory process, according to the account.

A group of creditors including Elliott Management Corp. and Franklin Resources Inc. held nearly 50 percent of the company’s bonds and organized with law firm Akin Gump Strauss Hauer & Feld LLP and investment bank Ducera Partners LLC, Bloomberg previously reported. A separate group of creditors including GoldenTree Asset Management LP organized with Houlihan Lokey Inc. and Milbank LLP. Frontier is getting advice from Kirkland & Ellis LLP and Evercore Inc.

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