(Reuters) - Windstream Holdings Inc filed for bankruptcy protection on Monday, days after the rural telecom service provider lost a legal battle against Aurelius Capital Management over a spinoff of its network assets into a real estate investment trust.
A U.S. district court on Feb. 15 ruled against Windstream’s spinoff of Uniti Group Inc, saying that violated agreements with bondholders, including hedge fund Aurelius.
“The Board of Directors and management team determined that filing for voluntary Chapter 11 protection is a necessary step to address the financial impact of (the) decision,” Chief Executive Officer Tony Thomas said.
The company listed assets in the range of $10 billion to $50 billion and liabilities in the range of $10 billion to $50 billion.
Windstream said on Monday it had received a commitment from Citigroup Global Markets Inc for $1 billion in debtor-in-possession financing to support business operations.
The financing, combined with cash generated by the company’s ongoing operations, will be available to meet Windstream’s operational needs, the company said.
Uniti shares were up 13 percent, while Windstream shares fell 39 percent.
Uniti, whose largest customer is Windstream Holdings, did not immediately respond to request for comment.
Reporting by Akanksha Rana in Bengaluru; Editing by Shinjini Ganguli