If Windstream is bouncing paychecks, how is it going to have money for things like bond payments, vendor payments, and building leases?

I posted this on another thread:

"Debtor-in-possession financing" (DIP) which Windstream obtained after filing bankruptcy is designed to ensure Windstream has cash to pay its ongoing bills through the length of the Chapter 11 bankruptcy process (which could drag on for for a year or more.)

Checks should not bounce going into future unless somebody screws up the paperwork -- thanks to the DIP loan, the money's there for ongoing expenses.

The DIP lender is guaranteed head-of-the-line privileges for repayment - ahead of the banks, bondholders, etc.

This something all subordinate parties agreed to (or at least didn't object to) in order to keep the company alive until everybody figures out what to do with it.

DIP financing is a standard feature of big chapter 11 bankruptcies. It means payroll will be met and vendors can have confidence to supply materials and services. Vendors may not get paid their pre-petition (pre-bankruptcy) bills but they'll definitely get paid for stuff supplied "post-petition".

DIP financing only applies to post-petition bills for ongoing operations.

It's positive that the DIP lender saw that there was >$1 billion worth of value such that he could make a low risk loan.

Here's the company press release:

https://investor.windstream.com/news/news-details/2019/Windstream-Holdings-Inc-Receives-Court-Approval-of-First-Day-Motions-to-Support-Normal-Business-Operations/default.aspx

Here's a more detailed technical filing the company made with the US Securities and Exchange Commission:

https://d18rn0p25nwr6d.cloudfront.net/CIK-0001282266/bd692d58-b96c-4d25-bdf5-819a33ce2c66.pdf

Thread regarding Windstream Corp. layoffs

If Windstream is bouncing paychecks, how is it going to have money for things like bond payments, vendor payments, and building leases?

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