TNCI President and CEO Brian Twomey said agents are a priority as the telecommunications provider continues to negotiate with its creditors in an effort to emerge from bankruptcy. The company filed its reorganization plan Monday.
“If we don’t take care of them [agents] nobody is going to take care of the business we are managing, so that’s got to be our primary focus,” he told Channel Partners.
The company revealed in its disclosure statement accompanying a plan of reorganization filed this week that it maintains a sales network of approximately 650 contractual relationships with independent sales agents, and that it owed roughly $700,000 to those agents as of the date of the bankruptcy petition.
Twomey could not say whether TNCI would entirely make whole those agents under its reorganization plan. The company continues to be in negotiations with various creditors. The disclosure statement noted that agents held “priority claims” if they were individuals or a corporation with only one employee; otherwise, they were “non-priority unsecured claims.” That means it’s possible some agents won’t be paid in full for previous commissions earned at the time of the bankruptcy filing.
“If you are not part of that priority claim process, you are subject to our ability or willingness to accept or reject an agreement,” Twomey said.
However, TNCI spokeswoman Jeanne Duca confirmed that the company has been paying agent commissions while operating under bankruptcy protection.
In addition, Twomey said TNCI’s intention is to maintain relationships with as many “active” agents as possible through the reorganization. However, he said the process presented the carrier a chance to “clean up the data base,” eliminating non-producing agreements.
Twomey also emphasized that TNCI has been in biweekly contact with its agents to update them during the bankruptcy process and that they are critical to the business since they are responsible for all of the company’s sales.
We intend to continue to keep the lines of communication open with our agents as we move through the process of emergence and will provide periodic updates as we hit key milestones,” added Michael Ginsburg, vice president of sales with TNCI, in a statement Tuesday.
One of the key issues of interest to agents is the status of TNCI’s agent equity plan. Four years ago, TNCI reached an agreement with the Agent Alliance to grant agents an opportunity for an equity stake in the company. Agent Alliance CEO Bill Power said that TNCI intends to honor agents’ equity rights if the company emerges from bankruptcy. If the company is sold during the bankruptcy, there are contractual provisions that would protect agents if the buyer breached the equity agreement, he said.
“Bottom line, the agents have an equity opportunity no matter how this thing goes,” said Power, who explained that agents’ total equity stake in the company is a “very complex formula” based in part on the agents’ billing base and the price that TNCI would fetch for the company.
Twomey explained that agents don’t currently hold an equity stake in TNCI, distinguishing the case from many other bankruptcies in which shareholder equity stakes are completely extinguished. Calculations of equity and payment values would occur at the time of a transaction with another company, he said.
“Nothing changes here. Because they don’t have equity, nothing is taken away,” he explained.
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May 18 2018 @ 20:40:07 UTC