Fusion Connect has emerged from chapter 11 bankruptcy, eliminating about $400 million of its long-term debt in the reorganization.

The company filed chapter 11 bankruptcy last summer 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 has successfully emerged from chapter 11 and its reorganization plan, which was approved by the U.S. Bankruptcy Court on Dec. 17, is now in effect.

Fusion Connect’s Michael Fair

“We are delighted to emerge as a stronger company,” Michael Fair, Fusion’s senior vice president of channel and alliances, tells Channel Partners. “The dedication from our partners during this process has been amazing and we look forward to a fantastic new year.”

In October, Fusion said it wanted to continue doing business with all of its partners and offered them new agreements. Fusion’s lenders now own the company.

“Now that we have emerged, we will be operating as a company with substantially less long-term debt,” the company said. “This, combined with the various financial gains we’ve made with new partnerships and expanded contracts, reflects the anticipated benefits of having gone through this process. We are kicking off this next chapter on a solid foundation, and we have a unique opportunity to carry our momentum forward and strengthen our relationships to continue driving our growth. As we have communicated from the start, we will continue to strive for operational efficiency while upholding our commitments to our employees, customers, channel partners and vendors. We will continue to build on the accounts we have earned, whether they were renewed contracts or new members of the Fusion customer family. We will also focus on developing our relationships with customers and channel partners who demonstrate continued faith in the future of our business.”

Fusion’s balance sheet has been strengthened through a $115 million exit financing loan provided by a subset of the company’s first-lien lenders.

“Now that we have achieved a more sustainable debt structure as a result of this process, we are confident that our relationship with our channel partners will be even stronger,” the company said. “As we go forward, we fully expect to find even more ways for us to sell, compete and grow together. In 2020, we are consolidating all of our single source solutions onto a single portal, which will simplify processes and procedures for our channel partners and our customers moving forward to make it easier than ever to do business with Fusion. Finally, we are introducing new targeted incentives to encourage our channel partners to expand the solutions they introduce and sell to Fusion customers.”

Fusion said it is implementing systems improvements that will allow it to install, maintain, grow and support its customers across all product lines.

“We are pleased that we have successfully emerged from this process with a sustainable capital structure that supports our future growth plans and uniquely positions us to continue delivering the same comprehensive portfolio of solutions well into the future,” it said.