NORWALK, Conn. — Connecticut based Frontier Communications announced Wednesday that they are filing for Chapter 11 bankruptcy.
Frontier entered a Restructuring Support Agreement (RSA) with bondholders representing more than 75% of Frontier’s approximately $11 billion in outstanding unsecured bonds.
Under the RSA, the bondholders have agreed to support the implementation of a plan that is expected to reduce Frontier's debt by more than $10 billion and provide significant financial flexibility to support continued investment in its long-term growth.
Frontier says they will continue to provide service to its customers without interruption and work with its business partners throughout the court-supervised process.
FOX61's Matt Caron covered the possibility of Frontier filing for bankruptcy in January 2020:
Last year, Frontier has more than $16-billion in debt, with $365-million due to be paid back in March 2020.
Five years ago, Frontier’s stock traded at $125 a share. Now, it’s just over 50-cents.
Frontier’s troubles began in 2014 with a botched takeover of AT&T.
“We found that Frontier had inferior systems,” explained Weidlich. According to Weidlich, the problem was compounded by a 2016 purchase of Verizon networks in California, Florida, and Texas. “They weren’t prepared to deal with that. They had a lot of turn in their customer service and customer support and it made a lot of customers leave the business.”
He’s hopeful new CEO Bernie Han, who led a turnaround at Dish Network, can be a change agent.
“Make the customers happy, grow the business and tackle the debt problem. We’re hopeful that he can lead us through those problems,” Weidlich said.
It’s a tall task in an industry of constant change.
Media Studies Professor at Quinnipiac University, Kearston Wesner said, “In that landscape, it’s difficult to survive using the same business model that they’ve been using.”
More customers are abandoning their landline telephone and cutting the cable cord in favor of streaming services.
“We’ve had issues with streaming competing with cable services for a long time. There’s been a history of cord-cutting and this is the inevitable conclusion,” explained Wesner.
Although based in Connecticut, Frontier services 29 states and has been seeing its customer base and workforce shrink.
