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Hedge Fund and Rural Phone Company Face Off in Court Over Debt Drama

  • Hedge fund claims default, rural telecom company cries foul
  • A $1.6 billion exchange may have been a rare ‘checkmate’
Updated on

Aurelius Capital Management’s single-handed attempt to drag Windstream Holdings Inc. kicking and screaming into default makes a stop today in Manhattan, where a judge will consider the kinds of tactics both companies and hedge funds can wield in a restructuring.

New York-based Aurelius and the rural telecommunications company have been locked in a dispute over whether Windstream has in fact defaulted on its debt. A timeline shows the complexity of this high-stakes chess battle, which is playing out move by move both in court and in the marketplace. It’s there that Windstream recently made its latest -- and what it hopes will be decisive -- move, inducing a majority of its bondholders to agree to waive default claims through a $1.6 billion debt exchange.