Fusion Connect Bankruptcy Plan to Swap Debt for Equity Approved

Cloud services provider Fusion Connect Inc. won approval of its Chapter 11 reorganization plan that transfers ownership of the company to secured creditors.

Fusion Connect’s plan, approved Dec. 17 by the U.S. Bankruptcy Court for the Southern District of New York, wipes out $272 million of debt by giving senior secured lenders equity after the company emerges from bankruptcy.

The shares’ value will amount to about 60% to 76% of the lenders’ claims, the debtor said in filed disclosures.

Second-tier secured creditors will get special warrants—which can be swapped for equity—allowing them to recover 4% to 7% on their claims. ...