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Windstream loses its decision against Aurelius Capital Management and the service provider could go bankrupt, according to reports.
by Joe Panettieri • February 15, 2019
Windstream, the troubled service provider, has lost a court ruling against Aurelius Capital Management and the fallout could be dramatic. In fact, Windstream Holdings Inc. (NASDAQ: WIN) shares are down about 40% in trading after the normal hours of the night at 6:24 pm. AND, and the company may be facing a potential bankruptcy.
According to the court's decision, Windstream is engaged in an "unauthorized sale and leaseback transaction" and Aurelius is therefore "entitled to the relief sought". documents viewed by ChannelE2E.
ChannelE2E has asked Windstream to comment on this decision and will update this article if we receive a response from the service provider. The Company's next regular earnings call is scheduled for February 21, 2019, according to Windstream's investor relations webpage.
The situation seems disastrous. According to Bloomberg:
"The fate of Windstream Holdings Inc. was questioned after a court ruled that the rural telephone company defaulted on its obligations in 2015 by separating from Uniti Group Inc.
The Manhattan federal court ruling is a win for New York hedge fund Aurelius Capital Management LP, which says the deal has unfairly stripped bondholders of badets backing their investment. Windstream, which serves approximately 1.4 million consumers and small businesses in 18 US states, warned that a defeat could lead to bankruptcy. "
Prior to the decision, Windstream sold some badets to strengthen its balance sheet. The discontinued badets include EarthLink's consumer Internet business as well as some fiber badets. The company also laid off workers and eliminated its dividend in 2018.
Windstream's most recent growth strategy has been to increase revenue from the SD-WAN and SIEM security services.
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