What will happen to FTR shares after the bankruptcy?
Under the terms of the pre-packaged bankruptcy plan, FTR shareholders will receive no recovery. The current shares will be cancelled on Ch.11 reorganization plan's effective date.
What happens to stockholders when a corporation reorganizes?
The corporation, along with committee members, creates a reorganization plan that must be confirmed by the bankruptcy court and agreed upon by all creditors, bondholders, and stockholders. Sometimes after a reorganization, a company will issue new stock that is considered different from the pre-reorganization stock.
What is an F reorganization?
F reorganization defined Sec. 368 (a) (1) (F) provides that an F reorganization is a mere change in identity, form, or place of organization of one corporation, however effected. Although the definition of an F reorganization seems short and simple, it does leave ambiguity as to the specific requirements.
What happens to pre-reorganization stock after restructuring?
After restructuring, the company usually issues new stock, making the pre-reorganization stock worthless. In some cases, holders of the old stock are allowed to exchange their securities for a discounted amount of the new stock, which is dictated by the plan of reorganization.
What happens to FTR stock?
What happened to “FTR” or “FTRCQ” stock? On April 30, 2021 as a result of Frontier Communications' successful emergence from its financial structuring, the old common stock of Frontier trading under the symbol “FTR” or “FTRCQ” has been extinguished without any consideration.
Is Frontier common stock worthless?
Shareholders of Frontier common stock won't be so lucky, as those shares will become worthless. Total Frontier debt is approximately $17.5 billion, according to a Bloomberg report.
Is Frontier Communications Going Out of Business 2021?
Frontier had accepted $283.4 million in annual support over six years to deploy service to 659,587 homes and businesses in 28 states—the company now says it will finish the buildout by the end of 2021, early enough to avoid financial penalties because of a 12-month grace period provided in US law.
Is Frontier Communications Going Out of Business 2020?
Frontier filed for bankruptcy in April 2020 with a plan to cut more than $10 billion of its $17 billion debt load by handing ownership to bondholders. It was the biggest telecom filing since WorldCom in 2002, reflecting years of decline in its business of providing internet, TV and phone service in 29 states.
What happens to a company stock after bankruptcies?
If it's a Chapter 11 bankruptcy, common stock shares will become practically worthless and will stop paying dividends. The stock may be delisted on the major stock exchanges, and a Q may be added to the stock symbol to indicate that the company has filed for bankruptcy.
Who bought out Frontier?
Global Crossing acquired the local exchange properties in 1999 when it purchased Frontier Corporation, originally Rochester Telephone Corporation. Citizens acquired the operations from Global Crossing North America for $3.65 billion.
Did Verizon buy Frontier?
Under the deal, Verizon will create a separate company for the assets being sold. That company will simultaneously be spun off to shareholders and merged with Frontier. It will carry $3.3 billion of debt that will be assumed by Frontier.
Does Verizon own Frontier Communications?
Frontier Communications ILEC Holdings, Inc. is a company created by Verizon Communications in 2009. Frontier Communications ILEC Holdings, Inc....Frontier Communications ILEC Holdings.TypeSubsidiary of FrontierFounded2009ParentVerizon (2009–2010) Frontier (2010–present)Websitewww.frontier.com2 more rows
What is Frontier Communications called now?
Frontier Communications' Northwest operations and assets are now Ziply Fiber. Ziply is a new company that is investing $500 million to improve its network and service. Frontier sold the assets to WaveDivision Capital in partnership with Searchlight Capital Partners for $1.35 billion.
Why did Frontier Communications Fail?
There were a lot of reasons for this, including terrible customer service, an unwillingness to repair its aging phone and DSL lines, taking on “growth for growth's sake” merger acquisitions of dying phone networks it couldn't really afford, and having just a seeming disdain toward its paying, often captive customers ...
Can you buy Frontier Communications stock?
One share of FTR stock can currently be purchased for approximately $0.26.
Is Frontier getting rid of cable?
Frontier Communications is no longer offering cable television to its new customers, but the Public Utilities Regulatory Authority says it does not appear to be illegal and has rejected the state's request to investigate the matter.
What is a reorganization?
A reorganization is a significant and disruptive overhaul of a troubled business intended to restore it to profitability. It may include shutting down or selling divisions, replacing management, cutting budgets, and laying off workers.
What happens to a company's assets after a reorganization?
Its assets will be sold and distributed to its creditors. A reorganization requires a restatement of the company's assets and liabilities as well as negotiations with major creditors to set schedules for repayment.
What is restructuring in bankruptcy?
This part of a reorganization is known as restructuring . A reorganization to stave off bankruptcy may have a favorable outcome for shareholders. A reorganization in bankruptcy is usually bad news for shareholders. Not all reorganizations are overseen by a bankruptcy court.
What is a reorganization in bankruptcy?
When supervised by a court during bankruptcy proceedings, a reorganiza tion focuses on restructuring a company's finances. The company is temporarily protected from claims by creditors for full repayment of outstanding debts.
What happens if a company is rejected in bankruptcy?
If the plan is rejected or is approved but does not succeed, the company is forced into liquidation. Its assets will be sold and distributed to its creditors.
What is a court supervised reorganization?
A court-supervised reorganization is the focus of Chapter 11 bankruptcy, which aims to restore a company to profitability and enable it to pay its debts. A company in financial trouble but not bankrupt may seek to revive the business through a reorganization.
Is a court supervised reorganization bad for shareholders?
A court-supervised reorganization is typically bad for shareholders and creditors, who may lose part or all of their investments. Even if the company emerges successfully from the reorganization, it may issue new shares, which will wipe out the previous shareholders.
What is an F type reorganization?
F-type reorganizations, which are a type of corporate restructuring permitted under subparagraph F, allow a single corporation to change their “identity, form, or place of organization” without incurring a tax bill. But F-type reorganizations can do so much more than that.
Is a merger taxable?
During a traditional (and therefore taxable) merger or acquisition, one organization is treated as transferring assets to another. Under an F-type (and therefore nontaxable) reorganization, one organization is treated as transferring assets to itself.
What is the confirmation of a reorganization plan?
In order for the plan to be confirmed by the court at least one class must vote to accept the plan.
When did Frontier Communications file for bankruptcy?
As expected, Frontier Communications ( FTR) filed for Ch.11 bankruptcy very late April 14 in the Southern District of New York ( docket 1 is actual filing form). Under the terms of the pre-packaged bankruptcy plan, FTR shareholders will receive no recovery. The current shares will be cancelled on Ch.11 reorganization plan's effective date.
Will the RSA raise new cash?
They could, according to the RSA, raise new cash via new financing to pay off current debt (other than unsecured notes and subsidiary debt), but given the current capital market, this is very unlikely. It is more likely they will just be reinstated.
Do shareholders get paid for RSA?
Under the RSA, shareholders are giving releases without being paid. In some other bankruptcy cases, shareholders are paid for the releases. For example, Whiting Petroleum ( WLL) shareholders are getting 3% of the new stock and warrants under their reorganization plan, which contains releases. Shares are expected to trade until ...
Do shareholders get recovery for bankruptcy?
Shareholders are getting no recovery - not even for releases. In some Ch.11 bankruptcy cases, shareholders are paid for releases. (Releases are basically protections given to various insiders from future litigation against them by any harmed parties, such as shareholders.) Under the RSA, shareholders are giving releases without being paid.
Do 75% of unsecured noteholders support the RSA?
Since according to the press release 75% of unsecured noteholders support the RSA, the only other real variable is getting the majority of holders to vote to accept. I doubt that a majority of holders will be voting no because they know they can't realistically expect to get better terms.
How much does Frontier invest in fiber?
According to the California PUC’s proposed decision to approve the reorganization in March, Frontier would have to invest about $1.75 billion in its fiber network in the state over the next four years, including expanding broadband availability in unserved or underserved communities.
When did Frontier Communications file for bankruptcy?
Frontier filed for Chapter 11 protection on April 15, 2020.
Who is the CEO of Frontier?
Frontier named former Vodafone UK CEO Nick Jeffery as its CEO in December. The analyst added that the company has identified millions of homes in its footprint that could be upgraded to fiber at attractive returns, “which would put the business on a sustainable path and potentially create billions of dollars in value.”.
When did Frontier file for Chapter 11?
Frontier filed for Chapter 11 protection on April 15, 2020. The company had worked out a restructuring plan that would exchange about $10.2 billion in debt for equity, and funnel about $1.4 billion toward building out fiber networks throughout its service territory.
What happens to stock after a company is reorganized?
After restructuring, the company usually issues new stock, making the pre-reorganization stock worthless. In some cases, holders of the old stock are allowed to exchange their securities for a discounted amount of the new stock, which is dictated by the plan of reorganization.
What is the ticker symbol for a company in Chapter 11?
For example, if a company with the ticker symbol ABC was placed on the OTCBB due to Chapter 11, its new ticker symbol would be ABCQ. 5 . Under Chapter 11, corporations are allowed to continue business operations, but the bankruptcy court retains control over significant business decisions. 1 Corporations may also continue to trade company bonds ...
What is a broker fee?
You pay a brokerage fee, also called a broker fee, when you make purchases and trade stocks or options. You also pay fees to maintain your account or pay for data. You’ll pay a fee if your brokerage includes subscriptions for research or investing help on trading platforms.
Is reorganization fee a barrier?
For example, if you want a specific socially responsible investing option (like halal investing or another very specific investment type) the reorganization fee shouldn’t be a barrier.
Federal Tax Refunds During Bankruptcy
You can receive tax refunds while in bankruptcy. However, refunds may be subject to delay or used to pay down your tax debts.
Discharge
If you successfully complete your bankruptcy plan you will receive a discharge of debt. A discharge releases you (the debtor) from personal liability for certain dischargeable debts. Some taxes may be dischargeable. Whether a federal tax debt may be discharged depends on the unique facts and circumstances of each case.
General Tax Questions
Please note: We cannot provide legal or other advice about your bankruptcy case. If you have questions about filing and paying your federal taxes you can find answers here on our website and in the list of resources on the right side of this page. If you want to speak to someone at the IRS please call:
What is the F reorganization strategy?
As mentioned earlier, the F reorganization strategy has gained popularity within private - equity transactions involving S corporations. The overall transaction plan generally requires the seller (s) of an S corporation target to engage in some pre - transaction restructuring. Generally, those steps are: (1) the shareholder (s) of a target S corporation (Target) form a new corporation (Target Holding) via contributing the shares of Target to Target Holding in exchange for all of Target Holding's shares; and (2) Target elects to be a qualified Subchapter S subsidiary (QSub), which effects a deemed tax - free liquidation of Target into Target Holding (and extends S corporation status to Target Holding per Rev. Ruls. 2008 - 18 and 64 - 250 ).
What is pre-transaction restructuring?
Pre - transaction restructurings for S corporation targets via an F reorganization provide various potential benefits to sellers and buyers. For sellers, this strategy allows shareholder (s): (1) to defer gain recognition with respect to rollover equity; (2) to obtain the tax benefit of transaction costs; and (3) to defer gain recognition with respect to deferred payments. For buyers, the strategy allows them: (1) to obtain a step - up in the tax basis of Target's assets for the purchase portion of the transaction; (2) to avoid the dependency on S corporation status for a valid Sec. 338 (h) (10) election; and (3) to avoid a need for cumbersome legal considerations common in an asset purchase, while at the same time preserving continued use of Target's federal EIN post - closing in the buyer's structure.
What are the third and fourth requirements?
The third and fourth requirements are to ensure that: (1) everything that the resulting corporation owns post - F reorganization is from the transferor, with limited exceptions as discussed above; and (2) the transferor will not retain assets and will terminate for tax purposes.
What is transferor corporation?
Transferor corporation is the only acquired corporation: The resulting corporation may not hold property acquired from a corporation other than the transferor corporation, such that, as a result of the reorganization, it would succeed to and take into account the other corporation's tax attributes under Sec. 381.
Is a 2553 S corporation required for Target Holding?
Therefore, under the facts in Letter Ruling 201724013, an election of S corporation status on Form 2553, Election by a Small Business Corporation, is not required for Target Holding, inasmuch as Target's original and existing S corporation election/status continues in effect for Target Holding.
Is an S corp taxable?
Generally, under U.S. federal income tax law, the income or loss of an S corporation is taxable to its shareholders. Many private - equity transactions are structured as an equity purchase rather than as a direct asset purchase. Sellers often prefer an equity sale because they expect to receive preferential capital gain treatment on any resulting ...
Is a S corporation a passthrough entity?
S corporations continue to be the predominant type of corporation for closely held businesses. As a result, many of the closely held businesses that private - equity firms wish to acquire these days are S corporations. Inasmuch as S corporations are passthrough entities, they are generally not directly liable for federal income taxes.
