FairPoint Communications Inc. creditors and lenders have given the bankrupt service provider’s reorganization plan a thumbs-up, but utilities officials in three states have yet to do the same.
A U.S. Bankruptcy Court in Manhattan approved the proposal on Tuesday and, as a FairPoint spokeswoman told the Dow Jones Daily Bankruptcy Review, there was no significant opposition.
“We were encouraged by the lack of material objections and the general consensus of support expressed by creditor groups,” Rose Cummings told the newswire.
The next step comes late next month or in early July once regulators in Maine, New Hampshire and Vermont decide whether to sign off on the restructuring motion. Maine’s Public Utilities Commission held a hearing on the matter last week but has yet to act.
So far, all of FairPoint’s secured lenders and most – 95.7 percent – of unsecured creditors have voted for the plan. Shareholders aren’t allowed to have a voice in the matter because they won’t get any money out of the reorganization.
A judge in March already said he can see no reason for the plan not to go through. “I cannot find this plan patently uncomfirmable,” the judge said.
FairPoint filed for bankruptcy after buying Verizon Communications Inc. landlines in Maine, New Hampshire and Vermont in 2008. It has suffered major customer service and billing issues since acquiring those assets, all of which led to insolvency.