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- Windstream filed an application for judicial reorganization under Chapter 11 on Monday.
- This decision was made after Windstream lost a legal battle with Aurelius Capital Management over whether it defaulted on its bonds in 2015 by separating from Uniti Group.
- Windstream stated that it chose this stage of proactive reorganization to ensure its operational momentum.
- The company said it had received a commitment from Citigroup for a billion dollar funding in order to bankrupt it.
Windstream, a provider of broadband communications and other data networks, fell 43% to $ 0.49 a share on Monday after the company filed for bankruptcy under Chapter 11.
This decision was made after Windstream lost a legal battle with Aurelius Capital Management over whether it defaulted on its bonds in 2015 by separating from Uniti Group. The company has chosen to use the court-supervised process to deal with debt maturities that have been accelerated as a result of Justice Jesse Furman's recent decision in the Southern District of New York against Windstream, according to a statement. .
Windstream said Citigroup was committed to providing $ 1 billion in funding to bankrupt it.
"After a thorough review of our options, including a call, the board of directors and the management team determined that filing the application for voluntary protection under Chapter 11 was a necessary step to dealing with the financial implications of Furman J.'s decision and its impact on consumers and consumers in the states in which we operate, "said Tony Thomas, Executive Director.
"By taking this proactive step, we will ensure that Windstream has access to the capital and resources we need to continue to leverage Windstream's strong operational momentum while engaging in constructive discussions with our creditors about the terms and conditions of Windstream. A plan of consensual reorganization. "
A year ago, Windstream was trading at about $ 8 a share.
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