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TimesArgus.com - We Are Vermont

FairPoint could face bankruptcy
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By DANIEL BARLOW VERMONT PRESS BUREAU - Published: June 27, 2009

MONTPELIER – FairPoint Communications could file for bankruptcy by the end of 2009 if the companies it owes money to don’t agree to delay interest payments on its debts, according to documents filed with the federal government this week.

The North Carolina company, which purchased Verizon’s landlines and Internet services in Vermont, New Hampshire and Maine for $2.3 billion last year, told the U.S. Securities and Exchange Commission that it is strapped for cash.

FairPoint asked bond-holders with more than $500 million invested in the company to consider delaying interest payments on those funds to give FairPoint a little more breathing room to get back on its feet.

The nine-page memo, filed with the SEC on June 24, states that if FairPoint is unable to delay payment on some of its debts, then the company “may need to seek alternative restructuring plans … or a bankruptcy proceeding, which, in each case, could negatively impact or completely eliminate the company’s ability to meet its cash interest payment obligations to holders of notes.”

FairPoint’s financial problems have been no secret. Since taking over Verizon’s systems, the company has experienced a slew of problems – including poor service to customers, confusing billing and lost e-mail addresses.
According to the SEC filing, problems from the change-over from Verizon’s computer system to FairPoint’s new system in the three states compounded the company’s financial difficulties.

“In addition, collection efforts have continued to be hampered by a lack of systems functionality, and, as a result, accounts receivable are increasing, which is adversely impacting the company’s liquidity,” the filing reads.

Beth Fastiggi, a spokeswoman for FairPoint’s Vermont operations, directed questions about the SEC filing Friday to a press release the company issued earlier this week. The release details the plan to delay some debt payments, which is “critical to its continued viability …”


In the e-mail to reporters, Fastiggi stressed positive news for the company, including FairPoint’s hiring of more than 1,000 people in the three states and the increase in broadband availability in Vermont from 65 to 76 percent.

“We’re making steady progress toward returning to normal operations,” Fastiggi wrote. “Bills are being processed and sent to customers on schedule and with significantly less errors. The volume of calls into our consumer call centers has returned to normal levels, allowing us to answer customer calls in a timely manner.”
But the latest SEC filing has the Vermont Department of Public Service worried.
Spokesman Steve Wark said the department knows about FairPoint’s financial problems – and its interest in possibly restructuring – but could not speculate on what happens if the company goes bankrupt.

“Frankly, this latest filing offers more questions than answers,” Wark said.
Wark said the department will use its resources to ensure that FairPoint provides what it said it would to Vermonters. But, he said, the telecommunications field is becoming increasingly crowded with options and FairPoint is “no longer the best option out there” for consumers.

“Our focus is on ensuring that Vermont’s dominant carrier remains strong,” Wark said. “But it could turn out that FairPoint is not the company to do this.”
Contact Daniel Barlow at Daniel.Barlow@timesargus.com.



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READER COMMENTS


Vermontrider asked if anyone is surprised. Absolutely NOT. Public service department and Verizon employees all said this would go bad. And it has. I think Fair Point has good intentions but they are just way, way over their heads.

I've had intermittent DSL outages, they lost a bunch of old emails and stopped forwarding any Verizon emails to one of my email addresses immediately upon taking over. My last phone bill showed every in-state long distance number as being someplace in Texas! Odd, very odd.
-- Posted by Ski Frog on Thu, Jul 2, 2009, 9:38 pm EST

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This whole mess is the result of Jim Douglas and Dave O'Brien.

Arrogant S O B's . . . . . so cocky before. . . . . .

.
-- Posted by Olde Man on Mon, Jun 29, 2009, 10:51 pm EST

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I don't think FairPoint should be bragging about their broadband service. Since they've taken over, I've had more outages and problems than I ever had in the previous 2 years of service under Verizon. Sometimes, I can't get a connection at all and when I contact FairPoint, the response is always that it's my equipment. Funny, most of the people I know who have FairPoint DSL are experiencing the same problem. Must be we all have faulty equipment. I've just started to explore my options, but rest assured, I'll be a former FairPoint customer in just a short while.

Oh, and let's not even begin to talk about their billing or their call centers. I've had a billing issue for months now and every time I call FairPoint, a rep answers the phone quickly, but then shuffles me off to no-man's-land where I sit on hold for over 30 minutes, sometimes having the call automatically disconnect.

This company is a joke and I don't know if it was Douglas, O'Brien, or who it was responsible for this mess, but it seems to me we all heard the warnings before the deal was approved. Someone should have to explain to all of us just what made this deal so attractive and none of the "Verizon wasn't getting it done" excuse either. Verizon had their problems, but are these really the only two landline companies in the country or was there a third option and if so, why wasn't that considered on behalf of us poor consumers who are now held hostage while FairPoint keeps trying to stop the inevitable sinking of this ship.
-- Posted by Mel Parker on Mon, Jun 29, 2009, 9:50 am EST

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"Thanks Jim Douglas and Dave O'Brien. You screwed a lot of Vermonters - again."

Ditto, as well as "people leaving droves" comment

As if the billing nightmare with my credit card due to them was not enough, I had to wait three weeks for a landline after my move, when they were told about it way before my move, now my placement of a second trouble call regarding my Internet in 5 weeks, I am about the make to leap to Comcast at much greater cost. ($17.99 vs. $24.95 or $42.95/mo.)

If the repairman shows up and blames me again for my Internet woes (open wireless default last time--fixed), that will be it. I am sick of this. I don't know how moving 3.5 miles, using the same computer and same Internet server package could produce such poor results. The only thing I can change in the equation is the ISP.
-- Posted by Christina Colombe on Sun, Jun 28, 2009, 6:21 pm EST

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This is exactly what numerous people testified would happen. It pisssses me off that the "OFF BROTHERS": Jim Douglas and his puppet, Dave O'Brien wouldn't listen to Verizon workers. This entire mess is due to the lack of leadership in the Douglas administration. They knew it had a good chance of failure but they didn't care.

Thanks Jim Douglas and Dave O'Brien. You screwed a lot of Vermonters - again.

.
-- Posted by Olde Man on Sun, Jun 28, 2009, 12:59 pm EST

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Wired networks in Vermont probably arent that profitable. The amount of outages that occur must be costly. I was wondering how a company as small as fairpoint is was going to service the Verizon network. I feel for the stock and bond holders with any money invested into this company. As they will turn out to be holding worthless securities. I think we have another charter communications. They have to beg borrow and steal to run there businesses. Than in turn they file bankruptcy to stay afloat.
-- Posted by ok then on Sat, Jun 27, 2009, 12:57 pm EST

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This should come as NO surprise to anyone. I have Faripoint now at both my homes and have had them at my summer home for years. Compared to my winter home it was a nightmare trying to reach office at my former veizon location.. People who have the option of having landline service from another carrier are leaving an have left Fairpoint in droves. Our best hope is for wireless to be state wide and use that service. The perfect storm has occurred for this company with the sinking economy and job losses.
-- Posted by charlene bostrom on Sat, Jun 27, 2009, 12:49 pm EST

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Unfortunately the landline business is dying and Verizon knew it when they sold the northern New England businsss to FairPoint. Verizon is moving toward a mostly wireless network except where they can build on their FIOS product. I really wish we could get Verizon back but I don't see it happening.

Thank God I don't feel as black about the future of Vermont and America as Bill and Laura Brueckner. It must be really hard to carry the weight of the state and country on two tired and angry backs.
-- Posted by Jest Askin on Sat, Jun 27, 2009, 11:03 am EST

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Maybe the companys name is an oxymoron? The name should be "Lousy Point"?
-- Posted by None None on Sat, Jun 27, 2009, 10:59 am EST

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Not many buisnesses sell unless there is a good reason, usually because they are not making money or they forsee that aspect. I can see Verizon coming back and buying the service back for a whole lot less money than what they were paid!
-- Posted by David None on Sat, Jun 27, 2009, 9:36 am EST

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Bankruptcy = Opportunity

To throw off the yoke of the robber barons who control this whole nation through corporate monopolization of all businesses and services people employed in Fairpoing should as the bankrupcy court for a conversion and reorganization of the co. from a corporation to a full partnership for all empolyees.

It is time for the people of this state, and nation to stop using people as a workforce with all salaries and prices set forming an economy that keeps all one paycheck away from the poor house. Executives are millionaires and billionairs while the people that actually accomplish the mission work as peons, and indentured servants. Then when the corporations run themselves onto the financial rocks it is not the board of directors, ceo, cfo etc that are punished it is the lower level workforce who actually performed the work who are fired and thrown out of the business.

One good example of how tightly we are controlled is healthcare. The people of this country cannot afford it.
Why dont the corporations pay more in order for people to meet the needs of basic subsistence?

With all people working in full partnership and salaries for all distributed in equal parts based the profits of the company every employess gets his or her share for the work performed. Full partnerships would introduce greater incentives for all to contribute more to achieve success and higher profits/salaries.
Corporations would not have hired employees if they were not required to accomplish the mission of the corporation.
Corporate officers are not owners of the corporations.
Time to reorginize corporations as full partnerships to keep corporate officers from skimming the cream off the top of business operations.

The States breathes life into corporations. It is time to convert the states responisibility from creating corporations to creating full partnerhsips.

Government and corporate officers have a stangle hold on the workforce, creating dependencies that are paid for with the the largest proportion coming from the workforce.

EVERYONE THAT thinks of themselves as a WORKFORCE that is a classification of people created by clinton and his congress, followed up by douglas and his legislature, must learn the Constitutions. We are a free and independent people with natural inherent and unalienable rights, we are not subservient to the people populating the seats of government or those who are corporate officers who employ economic controls on us.

Even the slaves went to work every day and Owners had to feed them properly as well as provide chothing and shelter in order to keep them healthy and make a profit. How are Vermonters and Americans unlike this basic profile.

Full Partnerships for all who cannot exist by establishing a means of their own personal subsistence.
-- Posted by Bill Brueckner on Sat, Jun 27, 2009, 7:20 am EST

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Is anyone really surprised?
When this deal first came down the pike, a whole host of people testified that the company was biting off more than they could chew but nevertheless it was passed and we are where we are right now.
So, what happens now? Wark says that there's more questions than answers and for consumers that's always scary. I'm curious what "options" he's talking about? Cel phones perhaps? Not where I live!


Time to start raising pigeons again.
-- Posted by Vermontrider None on Sat, Jun 27, 2009, 7:14 am EST

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