FairPoint Communications today released details of its long-awaited bankruptcy reorganization plan. After two months of delays, the financially troubled telecommunications provider said the new blueprint will make FairPoint a stronger company going forward.

North Carolina-based FairPoint has been hurt by a heavy debt load and technical problems since paying $2.3 billion for Verizon Communications' land line and Internet operations in Maine, New Hampshire and Vermont in 2008. The company now has more than $2.7 billion in debt, most of which is held by secured creditors that loaned the money when FairPoint acquired its northern New England assets.

"Today marks a milestone in the debt restructuring process, which began for us last October," said FairPoint CEO David Hauser today in a telephone news conference. Hauser says the reorganization plan calls for significantly reducing debt and issuing millions of new shares in the company.

"When FairPoint emerges it will do so with a capital structure that contains significantly less debt," Hauser says. "In fact nearly $1.8 billion -- or roughly two-thirds of our existing debt -- will be extinguished."

And, says Hauser, the company's secured creditors -- meaning mostly the major bond-holders who financed the Verizon takeover -- will end up with a 92 percent stake in the company.

Hauser says the delay in the filing was necessary to give FairPoint extra time to hammer out tentative deals with stakeholders, including union representatives and state officials from Vermont and New Hampshire. "The additional time we have taken at this stage in the process to reach these agreements will enable us to avoid costly litigation further on in the process, and will enable us to speed up the timeline for completing the remainder of the process."

"This really starts the critical part of the process," says Maine Public Advocate Richard Davies. "Up to this point we've talked with people and there's been a lot of meetings and discussions of things, but until we get what their initial cut of a plan is, we don't have something really good to react to, and now we have something."

While FairPoint was able to come to agreement with the labor unions, and with regulators in New Hampshire and Vermont, the state of Maine remains locked in a legal struggle to ensure Mainers get fair treatment from Fairpoint -- a struggle which Davies hopes is nearing completion.

"We've got a positive atittude towards this," he says. "It gives us a chance to get the interests of Maine ratepayers in front of the court and we hope that we can prevail in making sure the rate-payers interests are going to be properly taken care of as this case goes forward."

Davies would not elaborate on ongoing discussions between FairPoint representatives and the Maine Public Utilities Commission.
But, Fairpoint is currently resisting PUC demands that the company issue more than $8 million in rebates to customers in Maine because of poor service, an issue that is now in mediation.

Fairpoint CEO David Hauser says he's eager to reach an agreement with Maine. "Fairpoint remains committed to working hard for the state of Maine, as well as for the other states in which we do business, and you're not going to see us backing away from that commitment."

PUC spokeswoman Evelyn deFrees says the commission staff is in the process of reviewing the reorganization document, and has not had time to make an overall assesssment.

Tom Porter contributed reporting for this story.