TNCI Bankruptcy Reorg Hearing Postponed
The federal bankruptcy court in Massachusetts has granted a motion filed by Trans National Communications International Inc. (TNCI) on Tuesday to extend the date of the confirmation hearing on TNCI’s reorganization plan in order the service provider to continue negotiations with creditors.
The hearing was moved from May 16 to June 6, with the deadline to respond to the amended plan moved to June 1.
TNCI also filed a motion to extend the time in which it has the exclusive right to solicit acceptances of a plan of reorganization. The court will hear the motion on May 16. TNCI’s bank, Citizens Bank of Massachusetts, as well as the creditors committee, including the Agent Alliance, Sprint and Verizon, assented to the motions.
This is the second time the telecom company has sought an extension. On April 25, the court granted a joint motion by TNCI and its Creditors Committee to May 16. TNCI filed an amended plan and disclosure statement on May 11 in response to objections filed prior the hearing. Objections on the amended plan were due by 4 p.m. ET on May 15.
TNCI filed for Chapter 11 bankruptcy protection Oct. 9, 2011, and its reorganization plan on Feb. 6.
TNCI spokesperson Jeanne Duca said the company held an informational call Tuesday with its indirect sales agents. In the call, TNCI told agents the company has met and exchanged information with the creditors committee, Citizens Bank, as well as certain key carriers with respect to agreements for the provision of services post-bankruptcy.
“Carrier discussions are complex and although much progress has been made, additional time is required to complete these discussions,” Duca said.
Duca reiterated that there is no change in TNCI’s direction regarding agent agreements. Toward that end, the amended plan and disclosure statement states the assumption of acceptance of all agent contracts.
“Our plan is to complete carrier outstanding carrier negotiations, formalize terms with RBS Citizens, and then move to accept and cure agent agreements,” Duca said, noting this is likely to occur in the week immediately following the June 6 hearing.
Citizens Bank of Massachusetts is one of TNCI’s largest secured creditors with a claim of roughly $4.3 million. Some of the company’s largest unsecured creditors include AT&T, Sprint and Qwest Communications (now CenturyLink), which is owed nearly $2 million, according to the initial bankruptcy filing. Sprint is owed more than $5 million while AT&T is owed roughly $1.66 million.
In financial statements filed with the court, TNCI projects 2012 total revenues of $73.3 million. Of its projected $60.2 million in total direct costs, TNCI anticipated that agent commissions will account for nearly $8.3 million in costs. The company listed liabilities of $17.9 million and total assets of nearly $14.7 million as of December 2011.
