March 3 Sorenson Communications Inc
filed for Chapter 11 bankruptcy protection late on Sunday, a
court filing showed, as declining revenue and mounting debt
forced the company to consider restructuring.
Sorenson, which provides video relay services (VRS) for
people with hearing loss, said in less than a year it would be
obligated to pay about $1.28 billion.
Video relay service allows people with hearing difficulties
to use video telephones and similar technologies to communicate
via a sign language interpreter.
Due to regulatory changes, the debtors cannot pay or
refinance the obligations based on its projected revenue and
cash flow, the court filing showed.
The Federal Communications Commission's (FCC) 2010 reduction
in rates and increased minimum performance requirements for
video conferencing services, made it infeasible to provide the
service over the long term, the company said.
Sorenson and its affiliates generate revenue almost
exclusively from FCC compensations for its services, making them
especially susceptible to FCC-imposed rate changes, according to
The Salt Lake City, Utah-based company estimated assets of
about $645 million and liabilities of about $1.4 billion,
according to the filing.
Sorenson listed Allied Communications Inc, CaptionCall LLC,
SCI Holdings Inc, Sorenson Communications Holdings LLC, Sorenson
Communications of Canada ULC and Sorenson Holdings Inc as
As on Jan. 1, the company and its affiliates had about
6,800 employees, the filing said. The company says it is the
largest employer of American Sign Language (ASL) interpreters in
the United States.
The case is in re: Sorenson Communications Inc, Case No.
14-10454, U.S. Bankruptcy Court, District of Delaware.