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Fairpoint Files Chapter 11
Will reduce $1.7 billion in debt....
by Karl Bode 08:41AM Monday Oct 26 2009 Tipped by Bob61571 See Profile
As had been expected, Fairpoint Communications has filed for bankruptcy after struggling with the debt incurred when they acquired Verizon's DSL and landline networks in Maine, New Hampshire and Vermont. In a prepared statement, the company said the proceeding would reduce the company's debt load by $1.7 billion. "The day-to-day operations of our business will not be impacted by today’s actions," said David Hauser, Chairman and CEO of FairPoint. "We want to assure our customers, employees and vendors that we remain committed to continuing to provide reliable, uninterrupted service to all of our customers."

That's a tall order, given that Fairpoint wasn't even doing that before they filed for Chapter 11. While the company had improved slightly in recent months, long hold times and slow repairs remain commonplace for many Fairpoint customers. Unions are being asked to make concession in recent weeks, despite having predicted problems before the Verizon deal was signed. In recent weeks they've been blaming Verizon for the collapse, noting how the deal largely benefited Verizon's tax burden and debt load, but little else.

Plenty of blame is being heaped on regulators, who not only approved the deal, but allowed Fairpoint to dictate the pace and breadth of their recovery by submitting confidential service improvement plans they created, which are unreviewable by the public. Governors of the three impacted states over the weekend sent Fairpoint's CEO a letter urging the company to focus on improving service, as well as the company's financial fortunes.

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Time Keeper
Little Rock, AR

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reply to FFH5

Re: Bankruptcy may allow Fairpoint to cut too high wages

said by FFH5:

Maybe with the bankruptcy filing they can abrogate the union contracts and pay the union workers what they are worth - about half of what they were getting paid.
You sir, obviously have no idea what they are worth....do you? You're just being an armchair quarterback, with no inkling of what the job entails, or the procedures followed. Have you ever had to climb up a power pole with all the hazards involved, to restore someone's lifeline? Hmmmmm. So you're telling me that their salaries should be cut from base pay around $55-$60K/year (not counting OT), to around $30K/yr? And you still want me to get up at two in the morning, in the middle of a storm, and come fix your phone? Laughable! Luckily, you don't dictate what I can make in a year to feed/take care of my family of 4.