That’s according to Matthew Rosen, Fusion’s chairman and CEO. Fusion filed chapter 11 after its acquisitions of MegaPath and Birch Communications’ cloud and business-services business failed to meet performance projections.
Fusion entered a restructuring support agreement (RSA) with lenders holding more than two-thirds of the aggregate outstanding principal amount of its first-lien loans.
Fusion borrowed $680 million, including the senior lender loans, to acquire Birch and MegaPath last year.
In an interview at last week’s Channel Partners Evolution, Rosen talks about the chapter 11 process and what partners can expect when the company exists bankruptcy.
Channel Partners: What’s the latest in terms of the chapter 11 process? Is the exit still anticipated for this fall?
Matthew Rosen: We filed chapter 11 on June 3 and I think there were a couple of things that were very important that we focused on even prior to filing, which has helped us manage a successful process. The first is an agreement with our lenders, so we entered into chapter 11 with financing and an agreement with our lenders to make sure that the company was in a position to continue operations, which is always very important. The other is to focus on our core three assets … the internal people that we’ve got (our management team); our customers, making sure that the communication is there, making sure that we have no interruption in services; and the channel partners, to make sure everyone’s comfortable, they’re getting paid — it’s business as usual, same team, same people, same products and services. And I think we’ve managed that incredibly well.
We have decided to go with the lenders and so the lenders actually are going to end up owning the business as we emerge from chapter 11, and the timing … now is mostly dependent on regulatory approvals, which we’ve already started the process, and we expect it by November-December assuming no challenges in the regulatory approvals. We should be emerging as a much stronger business, especially financially.
If you take a look at the operating statistics of Fusion while we’ve been in chapter 11, [they] are about as good as they’ve ever been. So we’ve actually not stumbled at all. I think we’ve managed the process and used a very, very communicative approach. We’ve probably overcommunicated to people. If you look back at what we talked about when we first we entered into chapter 11, all of the things we we talked about doing, we’ve done, and especially around the channel.
CP: What sort of feedback have you been receiving from partners about the chapter 11 process?
MR: There was a lot of concern because …
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October 16 2019 @ 18:12:06 UTC