The Register Citizen (Torrington, CT)
Frontier seeks time to file bankruptcy operations report
Frontier Communications is asking a judge for a month or more leeway to file its first operating report as it seeks bankruptcy protection from creditors, with a separate report to Connecticut regulators showing double-digit percentage declines in its historic telephone customer base.
Frontier owns the Southern New England Telephone operations, with its corporate headquarters in Norwalk under new CEO Bernie Han and its main Connecticut operations center in New Haven.
The company filed for bankruptcy April 14, four years after taking on a massive load of debt to finance the purchase of Verizon Communications territories in Florida, Texas and California. Frontier owed $17.5 billion at the time of its bankruptcy, last week recording $1.35 billion in additional cash from the sale of operations in four states to a Washington cable entrepreneur.
Frontier’s shares are scheduled to be delisted from the Nasdaq at the opening bell on Friday with shares dropping below 9 cents in value last week — after trading at $81 at the time of the Verizon deal.
Last year, 12 percent of Frontier telephone customers in Connecticut dropped service, leaving it with about 377,000 households and businesses with Frontier landlines entering 2020, according to an annual report mandated by the Connecticut Public Utilities Regulatory Authority. Frontier registered its third sharpest decline on its home turf of Norwalk, where 22 percent of its telephone customers curtailed service, with the other four biggest declines occurring in New London and surrounding towns.
Frontier did not immediately file its Connecticut revenue and earnings totals, with the company having eked out a $11 million increase in 2018 after averaging annual losses of more than $200 million in its first three years operating the SNET territories it acquired in 2014 from AT&T.
On Friday, Frontier asked Judge Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York to allow it to delay filing until late June a monthly report on revenue, earnings and other operating details of its business. Such updates are a required part of the bankruptcy process. Drain is also handling the bankruptcy case of Stamford-based Purdue Pharma.
In justifying its request, Frontier stated it is unable to dredge up immediately all the claims, contracts and assets that would go onto its balance sheet. It noted the complicating factors of the disruptions caused by stay-at-home orders prompted by the coronavirus pandemic; existing demands on managers of running the day-to-day business; and the completion on Friday of its $1.35 billion sale of territories in Washington, Oregon, Idaho and Montana, “a business changeover that complicates the review” in the words of Frontier’s lead attorneys.
Since the initial bankruptcy filing, dozens of individuals and entities have filed varying claims on payments due, including the town of Brookfield for nearly $7,000 it is owed for police details directing traffic during Frontier line work.
“This information is voluminous and located in numerous places throughout the (Frontier’s) nationwide organization,” said attorneys with Kirkland & Ellis who are shepherding the company through bankruptcy. “Collecting the necessary information requires a significant expenditure of time and effort.”
That reporting structure has been overseen by the chief financial officer of Frontier Sheldon Bruha, who joined the company in 2018 and inherited the CFO role after the departure of Perley McBride to become CFO of rival Cox Communications.
Frontier separately is asking to retain the law firm Willkie Farr & Gallagher to handle any restructuring matters in which Kirkland & Ellis might have a conflict of interest, without delineating specific scenarios Frontier or Kirkland & Ellis anticipate might arise.