Avaya Gets Court's OK on Reorganization Plan

As it had hoped, Avaya today received the bankruptcy court's approval for the reorganization plan it crafted over the summer (see related post, "Avaya Takes Critical Next Step in Bankruptcy Process"). With this official OK in hand, an exit from bankruptcy will follow before year's end, Avaya announced.

In a prepared statement, new Avaya CEO Jim Chirico promised the company would be "stronger than ever and positioned for long-term success, with the financial flexibility to create even greater value for our customers, partners and stockholders."

As specified in the reorganization plan filed in August, Avaya will have approximately $3 billion of funded debt when it emerges from Chapter 11 protection -- roughly half of the debt plaguing the company when it entered into bankruptcy in January 2017. In addition, it will have a "$300 million senior secured asset-based lending facility" available when it exits court protection, and should have more than $200 million in annual cash interest savings compared to fiscal year 2016, Avaya stated.

The opening to this post has been updated to more accurately reflect expectations about the outcome of the reorganization plan confirmation hearing.

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