On Friday, Frontier's bankruptcy plan was approved by the U.S. Bankruptcy Court for the Southern District of New York "subject to final documentation."
After filing for Chapter 11 bankruptcy in April, Frontier said it has secured regulatory approvals, or favorable determinations, from six of the 25 states in its footprint. Frontier also still needs approval by the FCC before it can re-emerge from Chapter 11 bankruptcy. To date, Frontier hasn't said when it expects to complete its bankruptcy proceedings.
Frontier Communications filed for bankruptcy on April 14 to kick-start a prearranged $10 billion debt-cutting proposal backed by its largest bondholders. Frontier announced it had entered into a Restructuring Support Agreement (RSA) with bondholders representing more than 75% of its $11 billion outstanding unsecured bonds. Frontier's goal was to reduce its debt by more than $10 billion.
“Today’s confirmation marks the beginning of a new and exciting path forward at Frontier,” said Frontier President and CEO Bernie Han, in a statement. “With a significantly stronger financial foundation, Frontier will be well positioned to accelerate our transformation, invest in infrastructure and drive efficiencies to better serve our customers. At a time when our network services have never been needed more, our entire team has remained steadfast in their commitment to serving our customers, ensuring they are connected and informed. Looking ahead, we have a strong vision, one where we will win in the current competitive environment and create a better customer experience.”
Prior to Friday's approval, the Communications Workers of America, which represents 8,000 Frontier employees, and a consumer advocacy group (TURN) filed comments with the FCC on Thursday that raised concerns that Frontier may split off its fiber assets, among other items, as part of its restructuring plan.
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The CWA and TURN raised red flags with the FCC that the some of the shareholders were trying to spin off of the more profitable fiber assets as part of a "virtual separation" plan.
The letter to the FCC said splitting off Frontier's fiber assets from its legacy, copper-based assets would lead to upgrades in the former, but not in the latter areas. The CWA and TURN acknowledged in their letter to the FCC that the "virtual separation" mentioned in Frontier's Fourth Amended Plan wasn't clearly defined, "but could result in significant changes to Frontier's operations."
"This is appears to refer to a separation of Frontier’s fiber deployment from its non-fiber operations, including perhaps provision of retail services such as broadband and routine operations in the company’s 'legacy' or copper areas," CWA and TURN said in their letter to the FCC. "CWA and TURN are concerned that 'virtual separation' could have an effect on the quality and reliability of service received by Frontier’s customers, as well as Frontier’s ability to achieve the Commission’s broadband goals.
"To better understand this term, and its effects on Frontier’s operations and customers, CWA and TURN believe it would be necessary for the Commission to review numerous documents that were not filed with the Commission."
A spokesperson for CWA said on Monday that the union still doesn't know what Frontier's virtual separation plan means.
"We are asking the FCC and state PUCs to investigate in order to find out the meaning and the effect," said CWA's Beth Allen in an emailed statement to FierceTelecom.
Frontier hasn't said what virtual separation means either, but spokesman Javier Mendoza said in an email to FierceTelecom on Monday that "the documents speak for themselves."
Nasdaq suspended the listing of Frontier common stock at the opening of business on April 24. The stock was officially delisted from Nasdaq on May 11.