https://www.channelfutures.com/wp-content/themes/channelfutures_child/assets/images/logo/footer-new-logo.png
  • Home
  • Technologies
    • Back
    • SDN/SD-WAN
    • Cloud
    • RMM/PSA
    • Security
    • Telephony/UC/Collaboration
    • Cable
    • Mobility & Wireless
    • Fiber/Ethernet
    • Data Centers
    • Backup & Disaster Recovery
    • IoT
    • Desktop
    • Artificial Intelligence
    • Analytics
  • Strategy
    • Back
    • Mergers and Acquisitions
    • Channel Research
    • Business Models
    • Distribution
    • Technology Solutions Brokerages
    • Sales & Marketing
    • Best Practices
    • Vertical Markets
    • Regulation & Compliance
  • MSP 501
    • Back
    • MSP 501 Rankings
    • NextGen 101 Rankings
  • Intelligence
    • Back
    • Galleries
    • Podcasts
    • From the Industry
    • Reports/Digital Issues
    • Webinars
    • White Papers
  • Channel Futures TV
  • EMEA
  • Channel Chatter
    • Back
    • People on the Move
    • New/Changing Channel Programs
    • New Products & Services
    • Industry Honors
  • Resources
    • Back
    • Channel Futures 20: Top Tech Providers
    • Advisory Boards
    • Industry Organizations
    • Our Sponsors
    • Advertise
    • 2023 Editorial Calendar
  • Awards
    • Back
    • 2022 MSP 501
    • Channel Influencers
    • Circle of Excellence
    • DE&I 101
    • Technology Advisor 101 (TA 101)
    • Channel Leaders Lists
  • Events
    • Back
    • 2023 Call for Speakers
    • CP Conference & Expo
    • MSP Summit
    • Channel Partners Europe
    • Channel Partners Event Coverage
    • Webinars
    • Industry Events
  • About Us
  • DE&I
Channel Futures
  • NEWSLETTER
  • Home
  • Technologies
    • Back
    • SDN/SD-WAN
    • Cloud
    • RMM/PSA
    • Security
    • Telephony/UC/Collaboration
    • Cable
    • Mobility & Wireless
    • Fiber/Ethernet
    • Data Centers
    • Backup & Disaster Recovery
    • IoT
    • Desktop
    • Artificial Intelligence
    • Analytics
  • Strategy
    • Back
    • Mergers and Acquisitions
    • Channel Research
    • Business Models
    • Distribution
    • Technology Solutions Brokerages
    • Sales & Marketing
    • Best Practices
    • Vertical Markets
    • Regulation & Compliance
  • MSP 501
    • Back
    • MSP 501 Rankings
    • NextGen 101 Rankings
  • Intelligence
    • Back
    • Galleries
    • Podcasts
    • From the Industry
    • Reports/Digital Issues
    • Webinars
    • White Papers
  • Channel Futures TV
  • EMEA
  • Channel Chatter
    • Back
    • People on the Move
    • New/Changing Channel Programs
    • New Products & Services
    • Industry Honors
  • Resources
    • Back
    • Channel Futures 20: Top Tech Providers
    • Advisory Boards
    • Industry Organizations
    • Our Sponsors
    • Advertise
    • 2023 Editorial Calendar
  • Awards
    • Back
    • 2022 MSP 501
    • Channel Influencers
    • Circle of Excellence
    • DE&I 101
    • Technology Advisor 101 (TA 101)
    • Channel Leaders Lists
  • Events
    • Back
    • 2023 Call for Speakers
    • CP Conference & Expo
    • MSP Summit
    • Channel Partners Europe
    • Channel Partners Event Coverage
    • Webinars
    • Industry Events
  • About Us
  • DE&I
    • Newsletter
  • REGISTER
  • MSPs
  • VARs / SIs
  • Agents
  • Cloud Service Providers
  • Channel Partners Events
 Channel Futures

Regulation & Compliance


Shutterstock

Bankruptcy with Gavel

Fusion Connect Files Chapter 11 Bankruptcy

  • Written by Edward Gately
  • June 3, 2019
Senior lenders could take over the company. Here's what might happen with commissions.

Fusion Connect on Monday became the latest company in the channel to file for chapter 11 bankruptcy after its acquisitions of MegaPath and Birch Communications’ cloud and business-services business failed to meet performance projections.

Fusion and each of its U.S. subsidiaries filed voluntary petitions in the U.S. Bankruptcy Court for the Southern District of New York. It expects to emerge from chapter 11 before the end of the year. Fusion entered a restructuring support agreement (RSA) with lenders holding more than two-thirds of the aggregate outstanding principal amount of its first-lien loans.

Windstream filed chapter 11 in February, and Sungard AS filed and exited chapter 11 last month.

Senior lenders, owed about $574 million, could take over the company under a proposal to slash debt by $300 million unless a court-supervised auction prompts a more lucrative deal. A bid procedure motion will outline the sale process, and Fusion‘s management team and advisers will consider bids for its U.S. and/or Canada operations, but Fusion won’t be selling off individual assets. The court then would approve the sale.

A spokesperson for Fusion tells Channel Partners the company is “seeking new owners through this sale process to build a strong path forward. If we do not receive a higher offer than their baseline, our existing lenders have already agreed to take ownership. This will significantly delever the business and ensure that Fusion has the financing required to continue running our business and making investments that benefit of our agents, customers and stakeholders.”

Fusion borrowed $680 million, including the senior lender loans, to acquire Birch and MegaPath last year.

Mike Sapien, Ovum’s vice president and chief analyst of enterprise services, said concerns about the company’s finances arose from the Birch and MegaPath acquisitions, low growth network/communication trends and the debt that it created.

Ovum's Mike Sapien

Ovum’s Mike Sapien

“Due to the lack of growth and this debt cost, it was going to be tough row for Fusion,” he said. “Fusion was doing well prior to this in making the pivot to cloud-based communications, but these two acquisitions, associated debt and slow-to-no growth increased the risk that it would be unable to pay the debt costs. In a low-growth environment, it will be hard for Fusion to turn its business around and [will] make it a lengthy process.”

The RSA outlines a “clear path forward to significantly deleverage Fusion’s balance sheet, leading to a potential material reduction in interest expense, which would allow for more investment in enhanced customer experience, product innovation and infrastructure,” Fusion said.

In a letter to Fusion’s partners, chairman and CEO Matthew Rosen said his company is committed to paying all commissions in full and on time, and it will continue to deliver the same portfolio of advanced cloud communications and secure managed services.

“We continue to measure our success by your success, and as we strengthen our financial position, we fully expect …

  • Page 1
  • Page 2
Tags: Agents Cloud Regulation & Compliance

Most Recent


  • Making Waves
    7 Channel People Making Waves This Week at TD Synnex, Veeam, Kaseya, Zendesk, More
    Microsoft has discovered malicious activity by a state-sponsored threat actor based in China.
  • Businessman reading cloud computing news
    Cloud Computing News: VMware, Celigo, Google Cloud, AWS Dominate the Week
    Find out what the vendors are up to this week and how partners are impacted.
  • zero day vulnerability
    Barracuda Networks Identifies Long-Exploited Zero-Day Vulnerability
    The earliest identified evidence of exploitation dates back to October 2022.
  • Cybersecurity, strategic partnership
    Strategic Partnership Between Pax8, CrowdStrike Advances Cybersecurity for MSPs
    CrowdStrike keeps customers ahead of an expanding threat environment by delivering AI-powered protection, officials said.

Leave a comment Cancel reply

-or-

Log in with your Channel Futures account

Alternatively, post a comment by completing the form below:

Your email address will not be published. Required fields are marked *

Related Content

  • hybrid cloud
    NetApp Focuses on Unified Hybrid Cloud Experience with Latest Updates
  • Paying ransomware
    Feds Seize Most of Ransom Paid in Colonial Pipeline Ransomware Attack
  • IPO
    6 Things to Know About the Upcoming SentinelOne IPO
  • White House
    White House Urges Companies to Take Ransomware Attacks More Seriously

Upcoming Events

View all

Channel Partners Europe

June 13, 2023 - June 14, 2023

Channel Futures Leadership Summit

October 30, 2023 - November 2, 2023

Channel Partners Conference & Expo

March 11, 2024 - March 14, 2024

Galleries

View all

7 Channel People Making Waves This Week at TD Synnex, Veeam, Kaseya, Zendesk, More

June 2, 2023

Cloud Computing News: VMware, Celigo, Google Cloud, AWS Dominate the Week

June 2, 2023

Channel People on the Move: HPE, Lumen, Sophos, TD Synnex, AireSpring, More

June 1, 2023

Industry Perspectives

View all

Dell Technologies World: Dell Apex Expanded Across On-Premises, Cloud and Edge

May 22, 2023

Identity Is Increasingly Valuable – and Targeted

May 18, 2023

Gaining a Competitive Advantage through AV Managed Services

May 10, 2023

Webinars

View all

From Problem to Profit: Mastering the Science of Selling Using Business Outcomes

May 9, 2023

Meet the 2023 Channel Futures Channel Influencers

April 13, 2023

DE&I Dialogue: How the Right DE&I Initiatives Can Propel Your Business

April 5, 2023

White Papers

View all

6 UCaaS Reseller Challenges and How Real World Businesses Solved Them

February 1, 2023

Frost Radar: North American UCaaS Market, 2022

February 1, 2023

The Complete Guide to White-Label UCaaS for Reseller Success

February 1, 2023

Channel Futures TV

View all

Coffee with Craig and James Episode No. 123: MartinWolf M&A Advisors, CP Expo Preview

UScellular Takes On Rivals with Partner Program Simplicity

April 21, 2023

OpenText Simplifying Deal Registration, Doubling Down on MDF

April 21, 2023

Everything-as-a-Service: CloudBlue Touts Critical Customer Transition

April 18, 2023

Twitter

MSP 501

The industry's largest and most comprehensive partner awards program.

Newsletters and Updates

Sign up for The Channel Report, Channel Futures Update, MSP 501 Newsletter and more.

Live Channel Events

Get the latest information on the next industry-leading Channel Partners event.

Galleries

Educational slide shows and images from live events.

Media Kit And Advertising

Want to reach our audience? Access our media kit.

DISCOVER MORE FROM INFORMA TECH

  • Channel Partners Events
  • Telecoms.com
  • MSP 501
  • Black Hat
  • IoT World Today
  • Omdia

WORKING WITH US

  • Contact
  • About Us
  • Advertise
  • Newsletter

FOLLOW Channel Futures ON SOCIAL

  • Privacy
  • CCPA: “Do Not Sell My Data”
  • Cookie Policy
  • Terms
Copyright © 2023 Informa PLC. Informa PLC is registered in England and Wales with company number 8860726 whose registered and Head office is 5 Howick Place, London, SW1P 1WG.
This website uses cookies, including third party ones, to allow for analysis of how people use our website in order to improve your experience and our services. By continuing to use our website, you agree to the use of such cookies. Click here for more information on our Cookie Policy and Privacy Policy.
X