Fairpoint today announced that it has filed for bankruptcy, say Reuters. It states:
"Rural telecom services provider FairPoint Communications Inc (FRP.N) filed for Chapter 11 protection in a Manhattan bankruptcy court on Monday, under a pre-arranged plan that would cut its debt by $1.7 billion."
We have been saying this for well over a year. The interesting question is what impact this will have on Verizon and what shareholder suits will follow. In our opinion, as we have stated many times before, Fairpoint never had a chance and it should have known this from the outset. The management has just destroyed shareholder value and places the telephone users in the New England states at a disadvantage.
Reuters summarizes the claim:
"In its Chapter 11 filing, the company listed total assets of about $3.24 billion and debt of about $3.23 billion... its annual interest expenses would be reduced from more than $200 million to about $65 million...1.7 million access line equivalents... the seventh largest local telephone company in the United States."
In out 2002 paper on the Collapse of Telecom we predicted many such collapses. The question will be just where this leaves Verizon.
"Rural telecom services provider FairPoint Communications Inc (FRP.N) filed for Chapter 11 protection in a Manhattan bankruptcy court on Monday, under a pre-arranged plan that would cut its debt by $1.7 billion."
We have been saying this for well over a year. The interesting question is what impact this will have on Verizon and what shareholder suits will follow. In our opinion, as we have stated many times before, Fairpoint never had a chance and it should have known this from the outset. The management has just destroyed shareholder value and places the telephone users in the New England states at a disadvantage.
Reuters summarizes the claim:
"In its Chapter 11 filing, the company listed total assets of about $3.24 billion and debt of about $3.23 billion... its annual interest expenses would be reduced from more than $200 million to about $65 million...1.7 million access line equivalents... the seventh largest local telephone company in the United States."
In out 2002 paper on the Collapse of Telecom we predicted many such collapses. The question will be just where this leaves Verizon.
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