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story category Fairpoint Owes About $619 Million
As it tries to wiggle out of broadband deployment obligations...
12:05PM Tuesday Oct 27 2009 by Karl Bode
tags: competition · business · Op/Ed · Fairpoint Communications
Yesterday, as you might have heard, Fairpoint Communications filed bankruptcy, but promised customers that things would remain the same -- something not comforting to Fairpoint customers who've grown used to flaky service and even flakier support. The Nashua Telegraph breaks down what Fairpoint owes, noting that the $619 million worth of unpaid bills listed in FairPoint’s US Bankruptcy Court filing is owed to 50 creditors. $574 million is owed to their primary lender, but they also owe $19 million to a computer consultant, $2 million to Verizon Business Network, $351,000 for telephone poles and even the Nashua Telegraph for ad money:
This list isn’t exhaustive, however. Among other things, FairPoint owes The Telegraph for some advertisements. That won’t stop a full-page ad appearing in Wednesday’s Telegraph, however; the company paid for that one in advance.
Fairpoint meanwhile is supposedly working hard to get out of the improved broadband deployment obligations they made with regulators (you know, the ones they didn't meet anyway) according to Telephony Online:
Fairpoint’s lawyers are currently examining whether or not its Chapter 11 protection from creditors might also allow the company to renegotiate regulatory requirements in Vermont, New Hampshire and Maine, where it acquired 1.7 million access lines from Verizon.
That's ironic, given Fairpoint's promise to do a better job at broadband deployment than Verizon was the primary reason regulators approved the deal to begin with. Despite the fact that Fairpoint lawyers are busy trying to wiggle out of obligations, company CEO David Hauser told attendees of a conference call this week the company was "very committed to broadband rollout and to the next-generation network." Which is why his lawyers are working hard to erode the rules that would require broadband rollouts? Right.

For a refresher, regulators who approved the Fairpoint Verizon deal did so against the concerns of unions, consumer advocates and independent financial analysts. When the problems began, regulators then allowed Fairpoint to adhere to an improvement plan Fairpoint created with no substantive benchmarks, all of which was not reviewable by the public. Now, regulators are being asked to buckle on the one thing that made the deal worth it to consumers: better broadband coverage. Any guesses on how this all turns out?

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  8. There's Still No Evidence That Metered Billing Is Necessary
Forums » Fairpoint Owes About $619 Million
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S_engineer

join:2007-05-16
Chicago, IL
·Comcast


1 edit

Sigh

There should be a DOJ investigation into whom received what from this criminal acquisition. This is sad....everyone knew this would be the result, and yet it was allowed to go forward anyway. Somebody needs to be kneecapped (metaphorically, of course).
--
BF69~~~Please stop suffocating gerbils!

cableties
Premium
join:2005-01-27
·Verizon FIOS

Re: Sigh

Why waist court time and just give hand them over to Stalin!

Seriously, you think the DOJ will actually hold all those involved as accountable?

Fairpoint needs to have its executives assets frozen, IRS audit to every exec, and then have then subscribed to every major blog on the net!


--
Splat
scooper

join:2000-07-11
Youngsville, NC

said by S_engineer See Profile :

There should be a DOJ investigation into whom received what from this criminal acquisition. This is sad....everyone knew this would be the result, and yet it was allowed to go forward anyway. Somebody needs to be kneecapped (metaphorically, of course).
No - they need to be kneecapped - for real ! Both knees !
patcat88

join:2002-04-05
Jamaica, NY


1 edit
said by S_engineer See Profile :

There should be a DOJ investigation into whom received what from this criminal acquisition.
What part of Limited Liability Corporation do you know not understand?

edit: must not write jokes without coffee
openbox9

join:2004-01-26
Alexandria, VA

Re: Sigh

FWIW, Fairpoint is formed as a corporation, not a LLC. And, LLC is a company, not a corporation. These can be important distinctions in legal matters.

n2jtx

join:2001-01-13
Glen Head, NY

My Guess

quote:
Any guesses on how this all turns out?
My guess? They will buckle on that too.
--
I support the right to keep and arm bears.
patcat88

join:2002-04-05
Jamaica, NY

Bankruptcy court is free money!!!

Its quite obvious Fairpoint will try to use bankruptcy court to renegotiate all contracts it has with everyone. Unions and the state. Not sure if the spinoff/merger agreement falls under civil contracts, or government contracts like federal student loans/child support which would mean it can't be touched by bankruptcy court.

Going to bankruptcy court for a large corporation is like printing money. Everyone gets to keep their jobs. Fire the minions and unions, and say "tough luck you can't touch me" to everyone they owe money. Its better than the 0.000001% interest loans from the federal bailout!!!!
Bob61571

join:2008-08-08
Washington, IL

Not a good idea...

to stiff a major daily newspaper in your new service area.

Rob
In Deo speramus, God Bless the USA
Premium
join:2001-08-25
Kendall, FL

1 edit

How many times will we allow this?

I have this inkling that this won't be the last time they file for bankruptcy. I give them 5 years and they'll be back in court.

Van
Premium
join:2009-07-08
Washington, DC

Re: How many times will we allow this?

As long as companies make money and politicians get some cash, it will probably continue for as long as we live

TKJunkMail
Enjoy the sun
Premium
join:2002-03-03
Avalon, NJ
·Sprint Mobile Broa..
·Comcast

Regulators blew it when demanded unmeetable conditions

The regulators from the 3 states blew it when they demanded that Fairpoint meet conditions for approval that they KNEW where not feasible. In effect, they blackmailed promises from Fairpoint they knew that Fairpoint would never meet. They should have either approved the deal WITHOUT conditions or denied it all together. But the regulators played politics for the voters and made it look like they were looking out for their best interests.

When Verizon decided to pull out, the only rational choice for the state regulators was an approval without conditions and the end of union work rules. That they did not do that brought this whole mess on themselves.
--
My BLOG .. .. Internet News .. .. My Web Page


SteveCon
IBEW 2222 Boston, MA
Premium
join:2004-09-02
Burlington, MA
·Verizon FIOS


2 edits

Re: Regulators blew it when demanded unmeetable conditions

said by TKJunkMail See Profile :

The regulators from the 3 states blew it when they demanded that Fairpoint meet conditions for approval that they KNEW where not feasible. In effect, they blackmailed promises from Fairpoint they knew that Fairpoint would never meet. They should have either approved the deal WITHOUT conditions or denied it all together. But the regulators played politics for the voters and made it look like they were looking out for their best interests.

When Verizon decided to pull out, the only rational choice for the state regulators was an approval without conditions and the end of union work rules. That they did not do that brought this whole mess on themselves.
Why can't you let go of your "unions ruin everything" mentality? Unions don't run companies, management does. The deals with the PUCs were brokered by management, not the unions. Upper management came to an agreement with labor and signed a contract with the IBEW & CWA ahead of the contract's expiration - there was no lockout or strike.

Inept managers said they could make this work - the unions (among others - including many lower level "then VZ" managers) warned everyone otherwise. But no one listened. Managers patted themselves on the back for completing the deal while everyone else waited for it to all come crashing down. Management promised something that they couldn't deliver, not labor.

Management is 100% responsible for this mess. They have potentially ruined the livelihood of thousands of FairPoint employees in northern New England, and thrown their customers in the whole region (and maybe their entire footprint) into even more chaos due to uncertainty than when they were "running the business"

Way to go FairPoint upper management!
--
UNIONS: The anti-theft device for working people.

tim_k
Buttons, Bows, Beamer, Shadow, Kasey
Premium
join:2002-02-02
Stewartstown, PA
·Millenicom
·WildBlue

Re: Regulators blew it when demanded unmeetable conditions

said by SteveCon See Profile :

Management is 100% responsible for this mess. They have potentially ruined the livelihood of thousands of FairPoint employees in northern New England, and thrown their customers in the whole region (and maybe their entire footprint) into even more chaos due to uncertainty than when they were "running the business"

Way to go FairPoint upper management!
quote:
FairPoint Communications' top executive received $1.2 million in salary, bonus and stock awards last year, including a 30 percent increase in his base salary after the company's purchase of Verizon's landline network in northern New England.
»pressherald.mainetoday.com/story···d=254570

One thing you can always count on when these types of deals are made. The top executives will always make out like bandits. Just watch, soon they will be asking for concessions from the union and will lobby the court to allow 'retention bonuses' for top executives.
--
RIP my babies Buttons 1/15/94-2/9/07, Beamer 7/24/08, & Bows 12/17/94-10/11/09

justsayin

@sbc.com

said by TKJunkMail See Profile :

The regulators from the 3 states blew it when they demanded that Fairpoint meet conditions for approval that they KNEW where not feasible. In effect, they blackmailed promises from Fairpoint they knew that Fairpoint would never meet. They should have either approved the deal WITHOUT conditions or denied it all together. But the regulators played politics for the voters and made it look like they were looking out for their best interests.

When Verizon decided to pull out, the only rational choice for the state regulators was an approval without conditions and the end of union work rules. That they did not do that brought this whole mess on themselves.
nobody twisted fairpoints arm to go ahead with the deal and the conditions... They had the abilty to walk away but CHOSE not to...
rahvin112

join:2002-05-24
Sandy, UT

So you blame the states for imposing conditions that Fairpoint agreed to follow?

Most people would consider that the fault of Fairpoint for agreeing to the conditions. They had the opportunity to walk from the deal when the PUC's imposed the conditions on the deal, they chose to go forward with the knowledge that they couldn't do it. That in my mind is where the management stepped over a legal boundary. They made a binding agreement with the government that they failed to meet. At the least their jobs and reputations should be in jeopardy and hopefully the states will pursue aggressive action including breaking up the company or forfeiture of assets including last mile lines and hopefully at least one of the states has a criminal statue baring this foreknowledge of an inability to meet contractual requirements with government that will enable criminal prosecution of the management.
jjeffeory

join:2002-12-04
USA
Agreed.

Hpower
Roflmao

join:2000-06-08
Glendale, CA
·Charter Pipeline


2 edits

Bankruptcy owns

Damn that's a lot of money lol. $19 million for computer consulting haha Geeksquad demands yo money yo!!

What amazes me is how people let things get so bad and file for bankruptcy when it is way too late already. WTB brain cells for big shots who run these companies.
--
The Internet is about to go down....it is actually.
tmc8080

join:2004-04-24
Floral Park, NY

wrong chapter

they should go straight to liquidation & see if any of the states want in on owning a municipal telco. that would keep out the likes of at&t and verizon once and for all (well, maybe not forever, but at least 15-30 years worth).

maybe sprint would like to become a last mile service provider again, hmm... afterall, fiberoptics was their touchstone in the long-distance calling wars of the 80s & 90s!

Rey Mysterio

@suddenlink.net

from:
shit See Profile

619 Million $$$$

619 CONNECTING!!!!

VINTAGE REY MYSTERIO!!!!!

anon

@maine.edu

TWC

I'm glad I moved all services over to TWC before Foolpoint took over billing.

$24.95 for local phone with CID, CW and 7cent/min LD.

$19.95 for 768/128

$18.50 for 22 TV channels.

BOGBS
Premium
join:2004-05-11
Saco, ME
·RoadRunner Cable

Re: TWC

Hrmm, those savings won't help you much the next time a big storm rolls around that knocks power out for days. Cell phones do have backups, but FairPoint has built in battery backup on their lines, starting at the CO.

They also have a 17.99/mo 768/128 DSL plan, but I'm betting it's a little more than that with taxes.

You might have price beat, but certainly not reliability on the phone side, in the event of a disaster.

Also, your Time Warner service depends on FairPoint to operate. Trust me, if FairPoint starts having service issues, so won't other phone companies in this region.

hayabusa3303
Over 200 mph
Premium
join:2005-06-29
clubs:

Bailout money

anyone?

Harddrive
Premium
join:2000-09-20
Norwich, CT

guess what...

Verizon will be buying this area back from Fairpoint within a year.

BOGBS
Premium
join:2004-05-11
Saco, ME
·RoadRunner Cable

Re: guess what...

said by Harddrive See Profile :

Verizon will be buying this area back from Fairpoint within a year.
I doubt that... Hawaii Telecom wasn't bought back, and they're trying to offload Mid West territory to Frontier. I hope that one doesn't go through to, but I won't hold my breath!

Either way, CapGemini doesn't deserve 19 milllion! They should never be allowed to handle such a job again.
bigjoesmith

join:2000-11-21
Peoria, IL
·Cable Onda

Performance Bond needed

The regulators should approve these deals only with an up-front performance bond. In effect, telling Verizon "You've had a government-granted monopoly for years. Given the limited ability of our constituents to use market forces to correct market mistakes (i.e. it's a monopoly), if you want to sell this asset, you have to provide guarantees that the sale will result in a successful transition for our constituents."

The performance bond is large and paid-for up front by Verizon. It will increase the costs of these sales and make it less attractive to Verizon to unload debt at tax-payer expense. If Verizon goes ahead, it will provide the funds necessary to make a transition successful.
Forums » Fairpoint Owes About $619 Million


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