Several news agencies have recently reported that Frontier Communications Corporation is considering a pre-packaged bankruptcy by March 15, when about $356 million of debt payments come due. Frontier reportedly had a confidential meeting with lenders and advisers last week, although Frontier has not publicly confirmed the reports.
Many Texas electric cooperatives have pole attachment agreements with Frontier. A pre-packaged bankruptcy could affect cure amounts under those agreements, which may relate to litigation involving poles, make ready work, unauthorized attachment fees, and safety violations, among other things. If an electric cooperative has significant claims against Frontier relating to pole attachments, it will want to stay apprised of Frontier’s bankruptcy plan. Once filed, there will be a short time period for electric cooperatives to identify and object to an incorrect cure amount included in the plan. If an electric cooperative does not object to an incorrect cure amount, all amounts that are due to the cooperative and not included in the plan could be discharged by confirmation of the bankruptcy plan.
Electric cooperatives can prepare for a potential Frontier bankruptcy by identifying contracts with and amounts owed by Frontier. This will enable the cooperative to act promptly if a bankruptcy plan is filed.
For more information on how this could impact your business, contact:
- Melissa Sykes, Partner (msykes@mcginnislaw.com, 512 495-6029);
- Carl Galant, Partner (cgalant@mcginnislaw.com, 512 495-6083);
- Kevin Haney, Partner (khaney@mcginnislaw.com, 940 627-1100);
- Travis Vickery, Partner (tvickery@mcginnislaw.com, 512 495-6068); or
- Manuel Escobar, Partner (mescobar@mcginnislaw.com, 512 495-6153)