Broadview Networks, Inc., a business data provider of phone and Internet services, has sought to reorganize its debts through a Chapter 11 bankruptcy filing while obtaining protection from creditors.
The company announced in July that it had reached an agreement with some of its creditors to commit to a financial restructuring plan. This plan would give the creditors equity in the company as well as new five-year payment notes in exchange for wiping out $300 million in senior secured notes scheduled to mature on Sept. 1, 2012.
The company’s current largest equity holders are MCG Capital with 51 percent and Baker Communications Fund with 15 percent. Several other investors supported the restructuring agreement.
Broadview Networks listed about $500 million in total debt and assets in its bankruptcy documents. The business’s parent company, Broadview Network Holdings Inc., reported $5.3 million in net loss for the first quarter of 2012, with assets of about $260 million and liabilities exceeding $370 million. The company’s revenue fell from about $407 million in 2010 to $378 million in 2011.
The company is getting itself back on track, however, with about 36,000 current U.S customers and a sound new business model. In fact, many companies that experience extreme financial hardship find that restructuring under Chapter 11 can help them come out stronger. Business owners should know that bankruptcy does not have to be the end. With a good lawyer and financial adviser, a Chapter 11 filing can be the beginning of a new era in the life of a company.
Source: Bloomberg Businessweek, “Broadview Networks Files for Bankruptcy in New York,” Dawn McCarty and Tiffany Kary, August 22, 2012by