New Hampshire regulators approve FairPoint bankruptcy reorganization

NH board approves FairPoint reorganization

CONCORD, N.H. — New Hampshire regulators approved a plan Wednesday by FairPoint Communications to work itself out of bankruptcy and commended the largest telecommunications company in northern New England for making “steady progress” toward improved services.

The North Carolina-based company became hampered by heavy debt and technical problems since paying $2.3 billion in 2008 for Verizon Communications Inc.’s landline and Internet phone operations in Maine, New Hampshire and Vermont. It took over services in 2009 and filed for bankruptcy in October.

Since the switch, numerous customers have complained about FairPoint services. Many lost e-mail messages or couldn’t access them. Some complained they weren’t getting bills on time, and many said they couldn’t get through to FairPoint call centers to report problems.

In a 78-page order, the Public Utilities Commission said Wednesday that “FairPoint has made steady progress in addressing its operational problems and it has significantly upgraded the talent level on its board of directors and in senior management in the most critical areas.”

Colin Manning, spokesman for Gov. John Lynch, said the commission found the plan to be in the best interest of the customers. “And we agree with it,” Manning said.

FairPoint has more than 1.6 million access lines in northern New England.

Last week, Vermont regulators rejected FairPoint’s plan, saying they could not find that FairPoint had demonstrated the financial capability to meet its obligations. Maine regulators approved FairPoint’s plan last month. A final plan awaits confirmation by the U.S. Bankruptcy Court.

Jill Wurm, FairPoint spokeswoman in New Hampshire, said the company was pleased with the commission order.

“It helps us in our ability to restructure FairPoint’s debt and improve our balance sheet in a timely manner, which is vital to the long-term health of FairPoint and our ability to meet current and future needs of customers,” she said.

But she said it was not clear whether all three states have to approve the plan for it to go forward. She said the company was evaluating the Vermont board’s decision and what action FairPoint should take in that state.

According to the New Hampshire order, the “critical financial element” of FairPoint’s plan was the agreement by its secured lenders to reduce the company’s debt from $2.7 billion to $1 billion, including the discharge of unsecured debt. In return, the lenders will be issued new common stock in the reorganized company.

The commission noted that while FairPoint’s future business prospects and financial success were not assured, “there is a reasonable basis to conclude that FairPoint will be able to meet its commitments” under its agreement with New Hampshire. It also noted that FairPoint has sought multiple consulting firms since 2009 to correct “back-office failures that have plagued wholesale and retail customers.”

“The difficulties that persist cannot be attributed to a lack of attention or to stinting on resources,” the order said.

The commission said that despite an unacceptably slow start in resolving system problems, FairPoint was now realizing performance improvements and making staffing changes that appear to improve its ability to succeed.