Judge Approves Windstream Settlement

Windstream Holdings Inc. has received approval for a settlement agreement that removes a major roadblock to the company’s plan to emerge from bankruptcy this summer.

U.S. Bankruptcy Court Judge Robert Drain ruled on Friday in favor of Windstream’s proposed network lease settlement with Uniti Group Inc.

“The proposed settlement is complex and, I believe, essential to [Windstream’s] ability to successfully reorganize,” the judge said before approving the arrangement.

Drain’s decision provides momentum for Windstream as it seeks approval for a corporate restructuring plan that would allow it to resume operations without oversight from creditors and the bankruptcy court. Windstream expects it to emerge from bankruptcy in August.

“I believe it is important to give [Windstream] the confidence to move forward with the reorganization plan,” Drain said as he approved the deal, which has an estimated net present value of $1.2 billion.

Windstream general counsel Kristi Moody said Friday the decision was a boost for the company.

“Today’s decision is a significant step forward in our Chapter 11 process and keeps us on track to exit restructuring as early as late summer, pending regulatory approvals,” Moody said.

“The Uniti agreement provides significant and essential network investment for Windstream over the next 10 years, positioning the business for long-term growth.”

Drain applauded the companies’ “extraordinary mediation efforts” to resolve the dispute, citing the 27 days of talks.

The settlement approval ends a long-running dispute over a $650 million annual head lease agreement between the two Little Rock companies. Windstream filed suit last July to change the agreement, which outlines the company’s use of network infrastructure owned by Uniti.

As part of the settlement, Uniti agreed to invest up to $1.75 billion to improve Windstream’s network through 2030. Uniti will also pay Windstream approximately $490 million in cash and purchase fiber assets to Windstream for an additional $285 million.

Windstream chief executive Tony Thomas, chairman Alan Wells and the company’s financial adviser Nick Leone testified at a day-long hearing on Thursday as the judge considered the settlement. The hearing resumed Friday afternoon with brief closing arguments before Drain gave his consent.

In March, Windstream announced that its major creditors had approved the company’s restructuring proposal, which would reduce the company’s debt by more than $4 billion and allow Windstream to emerge from bankruptcy protection. here august. The company went bankrupt in February 2019.

Drain must also approve this restructuring plan.

Windstream and Uniti are due to release their first quarter results on Monday.

Business on 05/09/2020

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