Why at least some part of Windstream will survive and avoid liquidation

I see posts talking about the shutdown and liquidation of Windstream.

A company that loses money one year can carry that loss forward up to seven years as a tax deduction against profits in good years. I understand Windstream had almost 1 billion in tax loss carry forwards before bankruptcy.

You can't sell those to another party. Only Windstream can use them. If Windstream is liquidated, they just evaporate.

Also, they're only worth money if the post-bankruptcy entity is set up to make some money such that it owes taxes. Debt requires interest payments, so this suggests the creditors might restructure the new business with less debt than otherwise. (Interest payments reduce earnings so there's less need for tax benefits.) To maximize the value of the benefits, creditors woud take on more Windstream stock than they would otherwise.

Probably they'd want "preferred stock" which is sort of a hybrid between stock and debt:

https://en.wikipedia.org/wiki/Preferred_stock

Corporate (but not individuals) don't have to pay taxes on preferred stock dividends; they would pay taxes on interest payments from Windstream.

I leave it to others to figure out how much Windstream office furniture, PCs and obsolete network gear is worth if sold on eBay, but my guess is not much

This doesn't mean that big chunks of Windstream might not get shut down or sold off -- just that the creditors are going to want to have something viable that can use those tax benefits

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This started when Alltel spun off Windstream and laid 6billion In debt on it. Most of the debt came from wireless builds. Alltel generated a ton of money for the executives and board. Windstream was left with debt and wireline.

10130 Rose Brook Ln

Huntersville, NC 28078

We will survive and not have to pay taxes for A while with our carryover losses.

We’ve got this guys. The best days are ahead of us.

As a ws tech, i outsource fiber splicing and fiber repairs....just not enough manpower to do in house. I do all my own installs inside pop and Colo sites....chassis, card, sfp,xfp, fiber, fpd, power, etc

Well, I numbered my comments a minute ago but the site changed them both to "1." Should have been "1" and "2"

Look, I don't want to start a flame war but I'm trying to figure out how things work (I'm a customer). I see two very different comments:

@Z7Xj7AU-4pvh wrote

"Windstream doesnt own the fiber, Uniti does. Windstream leases EVERYTHING. And the CLEC techs dont touch the OSP either, they use contractors for everything. They even use contractors to install the SFPs and install the cards."

Then @Z7Xj7AU-4ajk wrote:

"@Z7Xj7AU-4pvh doesnt have a clue as to what we really do out here...."

My first reaction is, "this company is such a shambles and all those CLEC acquisitions so poorly integrated ... maybe they're both right, depending on where you go"

So I'm interested to learn more about what goes on where.

No flames, please -- just trying to learn

@Z7Xj7AU-4pvh doesnt have a clue as to what we really do out here....

Windstream doesnt own the fiber, Uniti does. Windstream leases EVERYTHING. And the CLEC techs dont touch the OSP either, they use contractors for everything. They even use contractors to install the SFPs and install the cards.

“There is no viable way to get out of $7B in debt.”

You don’t have to come up with 7 billion. If you could you wouldn’t be in chapter 11.

The creditors will take as much as they can get of the money they’re owed, but they won’t all get 100%

The question for employees and customers is whether Windstream is worth more continuing to operate or shutdown and sold off for its assets (equipment, etc)

If the decision is made to keep at least some of Windstream going, then the creditors will get a mix of debt (bonds) and ownership (stock) in the new company. A lot of debt will be cancelled.

I’ve never heard of an ILEC liquidating. I don’t think any ever have. Doesn’t mean it can’t happen but I hope the government would try to avoid it happening. I hope this wouldn’t happen — lots of small towns and customers would be seriously screwed.

Why would anyone buy those assets

I agree that unbundling the CLEC portion of the business is extremely difficult.

CLEC's as a business ARE dead 6 months from now, we don't get competitive pricing

on circuits from other LEC's. There isn't alot of value in a copper network, T1 and POTS

pricing just aren't worth it anymore. Cable and 4G circuits for the SDWAN products are

way better, technology has pushed us out of business. The courts and consultants will

figure that out and will put a plan together to split up the company. If you are not part

of their core Software focused business you will be left behind. They are already working on

sun setting the ATM and TDM portions of the old CLEC networks. Even post chapter 11 I don't

understand how we are a sustainable business. Much like the 5 to 1 reverse split we are just

buying time before it's all over. This just kicks the can down the road for a few more years.

There is no viable way to get out of $7B in debt. I'm interested to see what is on paper post

chapter 11 for the real value of the company. Lots more to come as the creditors meet with

the courts over the next few weeks/months.

Well I was a tech for Windstream, I was there for 12 years. When a company goes bankrupt, its just not good, I took a federal job 300 miles away to Houston, picked up my family and moved, cause a company thats bankrupt is no future. Anyway I get to houston and get 5G home with Verizon, Its very very fast. I got a modem sent in the mail, all I had to do was turn it on. Its unreal. When I was a windtream tech I was installing 1 Meg service, and that was this year. 5G is not everywhere, but in the future it will be. I see people on here that say they dont want to drive an hour away for another job cause Windstream pays them so good, to me your just an id--t. Windstream can not keep up with the future of technology , they just cant. This company went bankrupt, that should be all you need to know . When they went bankrupt the first thing I did was look for another job, and got it. If you stay goodluck, but really better your future. Windstream is not a future.

The problem with the whole "shut down the CLEC" game is multi-faceted.

First, the CLEC owns the majority of the OSP fiber. Winterstate for example.

Second, we use the CLEC network to carry ILEC traffic to avoid tariff issues and reduce cost.

Third, CLEC OSP network carries dark fiber customers and government contracts. We can't exactly tell these customers to pound sand. Some of them from the hPaetec days actually own the fiber in the sheath with our (now Uniti) fiber. Not leased, owned.

Fourth, the fairy godmother isn't going to maintain the CLEC fiber sites. The ILEC techs in my area are beyond abysmal in their understanding of technology. Many of them want to do dialtone and chase cable trouble until they are eligible to retire.

Keep the ILEC? You mean, retain the ancient switches and poorly maintained outside plant in rural America because that's where the money is? I think not.

It doesn’t matter how they do it. They’ve burned so many bridges it would take decades to even walk back in the door of the customers they’ve lost.

They'll will emerge. Emerge from high end vacations locations with their millions.

One thing is certain is this current bunch of clowns called the '5 id--ts' won't be around once the company emerges from Chapter 11 and is sold off in chunks.

They owe well over $7B. Stock is currently worth $.30 per share, and this after a recent 6 to 1 reverse split. The goal is to keep the ILEC territory and shut down the entire CLEC business and CLEC network. CLEC model is dead. They can operate OfficeSuite and SD-WAN out of a few data center cabinets. The NOC, activations and repair departments will be outsourced offshore and they will utilize channel partners for sales. There will not be any employees left, that is the goal. They are already taking steps towards collapsing the network. They lose money on every TDM customer and they just dont have enough high bandwidth customers. Margins are huge to push OfficeSuite over a customers existing ISP provider.

They might come out of ch11 but they will always have a dark cloud following them. An executive sponsor will not be an effective tactic after all the lies.

If you look back, Windstream hasn’t been very profitable since TT took over.

Windstream has a chance as long as this bunch of cr00ks are not running it.

Another comment:

No big financial creditor expects to get paid back right away out of the bankruptcy process. Windstream doesn't have to come up with billions of dollars right away.

A big chapter 11 bankruptcy ends up with the senior creditors getting bonds in the restructured company that pay off over time and pay them a nice interest rate The junior creditors might get bonds or stock.

It's a payment plan.

Senior creditors" are the ones with good collateral -- similar to the mortgage on your home.

"Junior creditors" either hold "subordinate liens" -- like second mortgages or else no collateral at all. The folks with no collateral are "unsecured creditors" which includes all of Windstream's vendors.

Thread regarding Windstream Corp. layoffs

Why at least some part of Windstream will survive and avoid liquidation

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