A bankruptcy court has approved Avaya‘s reorganization plan and the company expects to emerge from chapter 11 before the end of the year.

Avaya expects to have $2.9 billion in debt and a $300 million senior secured asset-based lending facility when it exits chapter 11 protection. The company had about $6 billion in debt when it filed for chapter 11 bankruptcy protection last January.

Avaya’s Jim Chirico

The U.S. Bankruptcy Court for the Southern District of New York confirmed Avaya’s second amended reorganization plan this week.

“The court’s approval of our plan is the culmination of months of hard work and extensive negotiations among our various stakeholders,” said Jim Chirico, Avaya’s president and CEO. “In the coming weeks, Avaya will emerge from this process stronger than ever and positioned for long-term success, with the financial flexibility to create even greater value for our customers, partners and stockholders.”

Avaya declined further comment. In a September Q&A with Channel Partners, Gary Levy, vice president of U.S. channels, and John Colvin, global marketing director, strategic partners, said chapter 11 didn’t stop the company from continued innovation.

Michael Finneran, industry analyst and Channel Partners contributor, said it’s “great to see Avaya, an old and proud company in our field, getting a new lease on life.”

Michael Finneran

“Clearly, the company had been staggered under its debt expense, but they still managed to keep moving forward on product,” he said. “While Avaya was on the ropes, the other guys had a field day selling to Avaya accounts, but the customers who hung on are likely glad that they did. With a strong product line, new management and the debt monkey (more like gorilla) off its back, things are looking good for Avaya.”

Steve Leidholdt, president and CEO of STL Communications, an Avaya partner, said while he’s looking forward to Avaya emerging from chapter 11, his company has been pleased with the “strong level of support from Avaya through the restructuring process.” He was among partners who expressed relief after the bankruptcy filing and its decision not to sell its call-center business.

“Moving forward I am confident that Avaya will roll out strong incentives to their partners that will enable us to solidify our existing Avaya customer base as well as grow our business by capturing new customers,” he said. “STL Communications is very bullish on our future opportunities for growth as an Avaya partner.”

Kenneth Heitner, president and CEO of Consolidated Technologies, also an Avaya partner, said the company has been a “great partner” throughout the reorganization.

“And now with their strengthened balance sheet and new executive leadership team in place, we agree that Avaya is positioned to win in the market,” he said. “We have all the confidence that Avaya will help us …

… to continue to create even greater business value for both our existing customers and new prospects. In fact, we recently built a new sales team and are investing significantly in order to partner deeper with Avaya to aggressively attack the market and capitalize on this opportunity.”

RingCentral, a competitor, is not convinced that Avaya will emerge a stronger company.

“While Avaya is reorganizing its corporate structure, their revenues are in a continuous secular decline,” said Praful Shah, RingCentral’s chief strategy officer. “The core reason for the decline is that their legacy on-premises products do not meet the needs of today’s modern mobile and distributed workforces; hence, they are being replaced by more innovative cloud solutions.”