Thread regarding Windstream Corp. layoffs

So we either lose the suit and go into instant bankruptcy for our junk bond debt (somewhere between 100 million and 6 Billion) or we win and just have to a years worth of fancy lawyer bills to our burning -tire dumpster fire of debt. So then we just have to cut out the customers and products that we know that we are going to take staggering losses in and I guess add the written off associated expenses of those to the aforementioned fire de dumpster. Then hey , that brings us to layoffs again, can’t seem to able to swing a cat around here for very long before hitting another round of layoffs. So on that topic, what percent t of our customers and product portfolio need to cut to no longer hemorrhage rectally so badly? And taking credit for getting rid of all that dead weight (or impressionable paying customers as I like to call them ) what are we left with? This new super force of genetically engineered super high margin customers, how many we talking and what

Margins were we thinking? We can do the quick math on billions owed - now add in the over the top fancy Nancy hail Mary marketing push along with the

Added legal bills and interest payments and dived the number of our new

Super customers x their margins we should know how many decades it will take us to make that. Maybe 10 or 12 billion owed by that time.

I’m not sure if Windstream wins the case they can avoid bankruptcy. Do they have cash to maintain its network and make ongoing work investments.?

We’ve seen Mops that eroded customers bases and repair teams flat out ignore trouble tickets for days. New revenue is key and I don’t get warm and fuzzies from talking to customers. Not saying it can’t be done but Winning the lawsuits doesn’t solve the other problems.

Windstream default trial begins with focus on subsidiaries

Jul 23, 2018 • Jason Aycock

The trial is under way over Aurelius' allegations of default at Windstream Holdings (WIN -2%) in its 2015 transaction with Uniti Group (UNIT -0.8%), with lawyers for U.S. Bank and Windstream questioning the company's John Fletcher.

Both sides are starting out by delving into details of which Windstream entities were part of the transaction and what Windstream told regulators at the time, Bloomberg reports.

Fletcher acknowledges some wording was "imprecise" in the documents: "This was one of the most complex deals I've ever worked on." But the benefits of the deal were clear at the time, he says, including for customers.

U.S. Bank's lawyer has presented Windstream's statements to regulators that Windstream subsidiaries transferred assets to then-named Communications Sales Windstream's lawyer counters that it was Windstream Holdings and not the subsidiaries leasing back the assets

I think the person below was referring to Type 2 circuits which are resold through the LEC. Everywhere we deployed lunar DSLAMs are on net copper in the ILEC space.

DSL is still very viable in ILEC markets. The major asset sale that will occur is consumer (residential) CLEC.

Spinning off the REIT was definitely creative and also definitely shady. We where and are desperate. Whether it was legal or not is to be decided. One thing to consider is the precedent It would set if we got away with it. It sounds like we exploited a loophole and while maybe being sneaky, a judge might not want everyone lining up to do the same thing to their creditors saying it was ok now because we got away with it.

If DSL is no longer a viable business plan why do Lee deploying these lunar DSLAMs instead deploying more fiber DSLAMs? And as far as I can tell from my department, cable isn’t in very high demand. It seems like customers are offered DSL first and cable if DSL doesn’t work out for whatever reason

That is correct no more wholesale pricing is required by FCC laws from the telecom act of 1996. We will pay full price for POTS, DS1,xdsl services. At that point the CLEC business model is dead. The plan is to sell off the TDM business or upsell those customers to IP (SDWAN and UCaaS). All services going forward will be provided by 4G/5G and cable or on net fiber. Anyone on the transport teams doesn't have a future.

So - what is interesting is the speculation of the positive side:

"Some distressed-debt professionals also believe Windstream has a viable business and a reasonable chance to turn it around within the next few years as it raises cash from asset sales and deploys new technology."

Even if we make it through the sh-- - asset sales will need to happen to keep the lights on. Which ones though? I'd think everything under CLEC as the costs of operating a clec is increasing in 2020 due to recent FCC rulings.

So - what is interesting is the speculation of the positive side:

"Some distressed-debt professionals also believe Windstream has a viable business and a reasonable chance to turn it around within the next few years as it raises cash from asset sales and deploys new technology."

Even if we make it through the sh-- - asset sales will need to happen to keep the lights on. Which ones though? I'd think everything under CLEC as the costs of operating a clec is increasing in 2020 due to recent FCC rulings.

Hedge Funds Set to Face Off Over Debt-Ridden Windstream

Aurelius Capital, Elliott Management take sides in broadband provider’s fight for survival

Two heavyweights of distressed-debt investing will face off this week over Windstream Holdings Inc. WIN -4.50% Hedge fund Aurelius Capital Management is looking to profit from the internet provider’s precarious financial position, while Elliott Management Corp. is betting it will stay afloat.

Aurelius Capital Management, founded by former bankruptcy lawyer Mark Brodsky, is known for winning big bets on distressed corporate bonds and sovereign debt. This time, Aurelius is betting against Windstream, people familiar with the matter said.

Aurelius in September sent Windstream a letter accusing the company of defaulting on a bond when it spun off its fiber-optic cable business. The move violated a provision in the company’s bond documents, Aurelius said.

A default on one bond could potentially trigger defaults on $6 billion of debt.

On the other side is Paul Singer’s Elliott Management, which has bought up Windstream debt. Elliott, equally adroit at navigating the courts and making money on distressed debt, is joined by other Windstream bondholders, including BlueMountain Capital and J.P. Morgan Asset Management, according to people familiar with the matter.

Elliott and Aurelius share a history. The firms joined forces to win a 15-year battle to get Argentina to pay them back in full on defaulted bonds. But Aurelius’s push for a Windstream default means Mr. Brodsky, 64, is now on the opposite side from Elliott, the firm where he got his start.

The legal fight will come to a head Monday, when a trial kicks off before Judge Jesse M. Furman in U.S. District Court in New York. Windstream is asking the court to void Aurelius’s declaration of default.

Windstream spun off its fiber-optic cable network into a separate company called Uniti Group Inc. in 2015. Aurelius claims that, as a result, it is owed full repayment on its bonds plus interest—a sum of $371 million. Windstream has said such an adverse ruling will push it into bankruptcy.

Windstream’s lawyers claim Aurelius has a position in Windstream bond insurance and is pushing for a default just so it can collect on instruments known as credit default swaps, according to court documents. In its own filings, Aurelius hasn’t said whether it has a position in Windstream bond insurance and has stuck to its arguments about the company’s spinoff violating bond covenants.

Elliott and BlueMountain have made various bets that Windstream will win its case. The funds have bought Windstream bonds as well debt and equity stakes in Uniti, according to people familiar with the matter. Keeping Windstream out of bankruptcy is key to protecting those investments. J.P. Morgan Asset Management is also a large holder of Windstream bonds, according to public documents.

Windstream, based in Little Rock, Ark., has been losing residential and business customers to cable and wireless companies for years and has slowly been replacing its copper network with faster fiber-optic cables. Aurelius says Windstream’s spinoff is really a sale-leaseback agreement that is prohibited by the company’s bond covenants. Uniti’s cable network remains essential to Windstream’s business, and under a 15-year lease Windstream pays $650 million a year to Uniti.

Windstream’s lawyers, in defense of the deal, rely on the fine print of the bond covenants. The company says Windstream Services, the subsidiary that issued the bonds, isn’t party to the lease with Uniti. It is the parent company, Windstream Holdings, that signed the lease and pays the rent to Uniti. Nothing in the Windstream Services bond documents forbids Windstream Holdings, the parent company, from entering into a sale-leaseback deal with Uniti, the company says.

Lance Vitanza, a distressed-debt analyst at Cowen and Co., believes Aurelius will have a tough time showing the Uniti spinoff was improper.

“I don’t think they’ll be able to prove that this was a violation,” he said.

Other observers of the closely watched case believe Aurelius has too many hurdles to clear in order to win in court. It must convince a judge to void waivers investors granted against any default tied to the Uniti spinoff and unwind a related debt swap last year.

“The main goal most judges have is to preserve companies as going concerns,” said Stan Manoukian of Manoukian Research, a distressed-debt research firm. “And typically they’re not inclined to reverse old transactions.”

Some distressed-debt professionals also believe Windstream has a viable business and a reasonable chance to turn it around within the next few years as it raises cash from asset sales and deploys new technology.

One sign that investors are bullish on Windstream is a decline in the cost of insuring $10 million of Windstream bonds against a default within one year. It has fallen to $1.9 million from about $3.2 million in March, one trader said.

Not everyone, however, is ready to count out Mr. Brodsky.

“I think [Aurelius’s] argument is stronger than what people have been thinking,” said James Miller, a bankruptcy lawyer at Drinker, Biddle & Reath.

While acknowledging the difficulty in predicting how the judge will rule, Mr. Miller, who isn’t involved in the case, believes Aurelius has a good shot if Judge Furman focuses solely on the language in Windstream’s bond documents and ignores broader implications of the ruling, such as the fate of the company and its thousands of employees.

Can anyone post the full story. That's a headline and you need a subscription to get it.

Stream seems to sound so optimistic, but when I read in Bloomberg that even if Windstream were to win doesn’t mean that the argument would be over. Windstream’s main argument is that if it is not ruled in their favor then it would push them us into bankruptcy. We are getting one plush, Streamed, pillow sided, argument, but we screwed them over.

There ya have it.. company has no free cash to work with.. none at all.

Windstream spun off its fiber-optic cable network into a separate company called Uniti Group Inc. in 2015. Aurelius claims that, as a result, it is owed full repayment on its bonds plus interest—a sum of $371 million. Windstream has said such an adverse ruling will push it into bankruptcy.