Kansas City-based Birch Telecom on Friday said it has filed for Chapter 11 bankruptcy and accepted the resignation of CEO Mike Cassity.
The CLEC made the filings after announcing earlier in the week it was laying off one-third of its workers. The company is struggling to compete in the wake of changed FCC rules restricting access to local phone lines.
Gregory C. Lawhorn has replaced Cassity. He has served as senior vice president and general counsel since Birch was founded in 1997.
The Chapter 11 process will allow us to substantially improve our balance sheet and capital structure while we continue to operate our business and focus on what we have always offered our customers, namely reliable service, easy conversion, better prices and a better way of doing business,” Lawhorn said in a news release.
Birch is a long-distance and Internet provider that formed after the Telecommunications Act of 1996 enacted rules for competition. It has 130,000 subscribers in 12 states and says those users will not experience interruptions in service. The CLEC has wholesale contracts with BellSouth Corp. and SBC Communications Inc.