BRATTLEBORO, Vt. (CN) – FairPoint Communications filed for bankruptcy in Manhattan on Monday, listing more than $2.5 billion in debts, and its shareholders and unsecured creditors are expected to get little or nothing. FairPoint has been plagued with customer complaints and scorched by state officials after it expanded fivefold in buying Verizon’s land lines in northern New England.
Vermont and New Hampshire state officials demanded that FairPoint answer questions about its shaky service after the company failed to make a smooth transition from Verizon. One whistleblower claimed FairPoint staged a phony display with bogus screen shots to dupe officials into believing it was ready to go. FairPoint has disputed that allegation, but its problems have been front-page news in Vermont and New Hampshire for months.
The bankruptcy filing was expected.
FairPoint’s stockholder equity was estimated at $1.2 billion in June, down from $23.8 billion at the beginning of the year, the New Hampshire Business Review reported Monday.
Unsecured creditors are expected to get 2 cents on the dollar, plus another nickel to buy stock later, the Business Review reported.
FairPoint shareholder will be “wiped out,” according to the Business Review.
Verizon spun off FairPoint in 2007-08, issuing 1 share of FairPoint stock for every 53 shares of Verizon.