Broadview Networks Files for Bankruptcy in New York

Broadview Networks Inc., a provider of phone, Internet and data services for businesses, sought bankruptcy protection from creditors.

The company, based in New York, listed debt and assets of as much as $500 million in Chapter 11 documents filed today in U.S. Bankruptcy Court in Manhattan.

Broadview listed its largest equity holders as MCG Capital Corp., with 51 percent of the common stock of Broadview Networks Holdings, and Baker Communications Fund LP with 15 percent of that stock, as well as shares of its preferred stock.

Broadview Networks announced July 13 that it had reached an agreement with some creditors for a financial restructuring plan which will exchange the company’s $300 million in senior secured notes for new five-year notes and equity in the company.

The restructuring agreement garnered support from a group of investors controlling about two-thirds of the outstanding notes, in addition to holders of about 70 percent of the preferred stock, according to a filing with the Securities and Exchange Commission. The 11.375 percent senior secured notes mature on Sept. 1.

Broadview Network Holdings Inc., Broadview Networks’s parent company, reported a $5.3 million net loss on revenue of $88.5 million for the quarter ended March 31. The balance sheet showed total assets of $258.3 million and total liabilities of $373.4 million. Revenue fell to $378.2 million in 2011 from $407.7 million the previous year.

Broadview Network Holdings, through affiliates, has about 36,000 business customers in the U.S., according to its website. The company said July 13 it hired Willkie Farr & Gallagher LLP as restructuring counsel and Evercore Group LLC as its financial adviser.

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