Bankrupt Fusion Connect Cancels Sale, Will Swap Debt for Equity

Bankrupt cloud services provider Fusion Connect Inc. has abandoned a plan to sell its U.S. business and instead will seek approval of a reorganization plan giving the company equity to its secured lenders.

The company failed to generate enough interest from buyers for its U.S. operations, according to its Sept. 4 amended reorganization plan and accompanying disclosure statement.

The New York-based company, which filed Chapter 11 in June, will still explore selling its operations in Canada.

In the revised plan, lenders with first priority liens will receive all the equity for a cancellation of about $585 million of debt. They’ll ...