It's coming out of BK folks. Buy NOW!!!!!
Form 8-K for CHOICE ONE COMMUNICATIONS INC
12-Nov-2004
Bankruptcy or Receivership, Sale of Equity, Material Modifications,
ITEM 1.03 BANKRUPTCY OR RECEIVERSHIP.
As previously disclosed, on October 5, 2004, Choice One Communications Inc. (the "Company") and each of its direct and indirect subsidiaries (collectively, the "Debtors") filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court"). The Debtors continued to operate their businesses as debtors-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court.
On November 9, 2004, the Bankruptcy Court entered an order (the "Confirmation Order") (i) approving the Disclosure Statement (the "Disclosure Statement") relating to the Debtors' pre-packaged chapter 11 plan of reorganization (the "Plan") and (ii) confirming the Plan. The Disclosure Statement was attached as Exhibit 99.1 to the Company's Current Report on Form 8-K filed on September 15, 2004. A copy of the Confirmation Order, with a copy of the Plan as confirmed attached thereto, is attached hereto as Exhibit 2.1 and is incorporated herein by reference.
The following is a summary of the matters to occur pursuant to the Plan. This summary only highlights certain of the substantive provisions of the Plan and is not intended to be a complete description of, or a substitute for a full and complete reading of, the Plan. This summary is qualified in its entirety by reference to the full text of the Plan.
The Plan provides for a financial restructuring (the "Restructuring") of the Company's senior and subordinated indebtedness. The Restructuring involves a significant reduction of the Company's outstanding indebtedness and a conversion of the balance of such indebtedness into 100% of the Company's equity. Pursuant to the Plan, (i) the holders of the Company's senior indebtedness under its senior credit facility in the aggregate amount of approximately $404 million will receive new senior secured notes in the aggregate principal amount of $175 million and 90% of the Company's common stock to be issued upon consummation of the Plan, (ii) the holders of the Company's subordinated notes in the aggregate amount of approximately $252 million will receive 10% of the common stock of the Company to be issued upon consummation of the Plan and warrants (the "Warrants") to acquire additional shares of the common stock of the Company, and (iii) the currently outstanding shares of the Company's common and preferred stock will be cancelled without any distribution to be made to the holders of such shares. The Warrants will expire after seven years and will be issued in two series, one for 657,567 shares of the Company's common stock at an exercise price of $13.50 per share, and the other for 2,401,592 shares of the Company's common stock at an exercise price of $20.00 per share. The common stock, Warrants and shares of common stock to be issued upon exercise of the Warrants are exempt from registration under the Securities Act of 1933, as amended, pursuant to Section 1145 of the Bankruptcy Code.
The equity securities of the Company to be outstanding as of the effective date of the Plan will be only those securities issued under the Plan, which will consist of
20,000,000 shares of common stock. In addition, 3,059,159 shares of common stock will be reserved for issuance upon exercise of the Warrants and 1,261,329 shares of common stock will be reserved for issuance as restricted stock or upon the exercise of options pursuant to a new management equity incentive plan.
The Plan provides that other general unsecured claims will be unimpaired. Administrative expense claims and priority claims will be paid in full.
Information regarding the assets and liabilities of the Debtors is contained in the Disclosure Statement.
Although the Bankruptcy Court entered the Confirmation Order on November 9, 2004, the Plan is not yet effective. The Plan provides that it will become effective upon the satisfaction or waiver of certain conditions precedent, including the (i) receipt of all requisite regulatory approvals and
(ii) execution and delivery by the parties thereto of all agreements, instruments or other documents necessary to implement the terms and provisions of the Plan, including, among others, the new credit agreement to be entered into by the Debtors, which will provide for a new $30 million revolving credit facility. The terms of the new credit agreement have been fully negotiated and documented and the Company has a commitment from lenders to provide the new revolving credit facility. The Company anticipates that the effective date of the Plan will occur on or about November 18, 2004.
Following consummation of the Plan, the Company will be filing a Form 15 with the Securities and Exchange Commission to withdraw the registration of its common stock under the Securities Exchange Act of 1934, as amended.
ITEM 3.02. UNREGISTERED SALES OF EQUITY SECURITIES.
The information provided in Item 1.03 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02.
ITEM 3.03. MATERIAL MODIFICATION TO RIGHTS OF SECURITY HOLDERS.
The information provided in Item 1.03 of this Current Report on Form 8-K is incorporated by reference into this Item 3.03.
ITEM 5.01. CHANGES IN CONTROL OF REGISTRANT.
The information provided in Item 1.03 of this Current Report on Form 8-K is incorporated by reference into this Item 5.01.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
2.1 Order of the Bankruptcy Court, dated November 9, 2004, confirming the Debtors' Joint Plan of Reorganization, together with such Joint Plan of Reorganization, as so confirmed.
____________________________________________________________________
ROCHESTER, N.Y.--(BUSINESS WIRE)--Nov. 10, 2004--Choice One Communications (OTCBB: CWON - News):
* Company expected to successfully emerge from "prepackaged" chapter 11 proceedings on or about November 18, 2004
* Company to exit chapter 11 with $30 million of new financing
* Restructuring will reduce Choice One's debt from over $1 billion to approximately $205 million, strengthen its balance sheet, and increase its liquidity
* Company's client base has continued to grow and normal operations have continued without interruption throughout the chapter 11 proceeding
* Reduced debt, new financing, and continued growth from operations enable company to remain a premier telecommunications provider
Choice One Communications (OTCBB: CWON - News), an Integrated Communications Provider offering facilities-based voice and data telecommunications services, including Internet solutions, to clients in 29 Northeast and Midwest markets, today announced that the U.S. Bankruptcy Court for the Southern District of New York has approved its "prepackaged" financial restructuring plan, which when consummated will substantially reduce the Company's debt, strengthen its balance sheet, and increase its liquidity. As a result, Choice One anticipates that its Plan of Reorganization will become effective and the Company will emerge from its chapter 11 proceedings on or about November 18, 2004.
Reflecting the fundamental strength of its operations and its future growth and earnings potential, Choice One's Plan of Reorganization was accepted by 100% of its lenders prior to the Company's voluntary chapter 11 filing on October 5, 2004. Under the Plan of Reorganization, which was confirmed by the Court following a hearing on November 8, Choice One will (i) convert approximately $404 million of outstanding senior debt into $175 million of new senior secured term notes with a six-year term and 90% of the common stock of the reorganized Company; (ii) convert approximately $252 million of outstanding subordinated debt into the other 10% of such common stock and into two series of seven-year warrants to purchase additional shares of common stock from the reorganized Company; and (iii) upon completion of the restructuring, obtain a revolving credit facility of $30 million from a subset of its existing lenders to provide for ongoing working capital requirements.
"We are pleased that the Court has confirmed our Plan of Reorganization, an important milestone that keeps us on track to execute our 'prepackaged' financial restructuring as planned in less than 45 days from start to finish," said Steve Dubnik, Chairman and Chief Executive Officer. "I am excited to report that our business has continued to grow during this time and we are grateful to our colleagues, clients, lenders and suppliers, whose support has allowed us to move through the reorganization process very quickly, efficiently and effectively. Our ability to achieve such a significant financial restructuring in less than two months is virtually unprecedented in our industry and will leave Choice One well positioned to capitalize on future growth opportunities."
Dubnik concluded that, "Successful completion of this process greatly enhances our ability to remain a premier provider of telecommunications services, to continue to provide great service to our clients, and to grow our business, now and in the future."
About Choice One Communications
Headquartered in Rochester, New York, Choice One Communications Inc. (OTCBB: CWON - News) is a leading integrated communications provider offering voice and data services including Internet solutions, to businesses in 29 metropolitan areas (markets) across 12 Northeast and Midwest states. Choice One reported $323 million of revenue in 2003, has more than 100,000 clients and employs approximately 1,200 colleagues.
Choice One's markets include: Hartford and New Haven, Connecticut; Rockford, Illinois; Bloomington/Evansville, Fort Wayne, Indianapolis, South Bend/Elkhart, Indiana; Springfield and Worcester, Massachusetts; Portland/Augusta, Maine; Grand Rapids and Kalamazoo, Michigan; Manchester/Portsmouth, New Hampshire; Albany (including Kingston, Newburgh, Plattsburgh and Poughkeepsie), Buffalo, Rochester and Syracuse (including Binghamton, Elmira and Watertown), New York; Akron (including Youngstown), Columbus and Dayton, Ohio; Allentown, Erie, Harrisburg, Pittsburgh and Wilkes-Barre/Scranton, Pennsylvania; Providence, Rhode Island; Green Bay (including Appleton and Oshkosh), Madison and Milwaukee, Wisconsin.
For further information about Choice One, visit our web site at choiceonecom.com or contact us at 1-888-832-5800.
Contact:
Choice One
Phil Yawman, 585/530-2604
pyawman@choiceonecom.com
I've seen these things play for a ton in a single day in the past people. Be on this thing!!!!!!!!!
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'wid ma mind on ma money an' ma money on ma MIND!!!!!!!
Do Da Due!!!
RUFF!!!
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