July 18, 2022 – The Court hearing the GTT Communications cases has extended (for a second time) the periods during which the Debtors have an exclusive right to file a Plan, and solicit acceptances thereof, through and including October 1, 2022 and November 30, 2022, respectively [Docket No. 540]. Absent the requested relief, the Plan filing and solicitation periods were scheduled to expire on June 28, 2022 and August 27, 2022, respectively. No material developments have occurred since the Debtors requested the second set of exclusivity extensions at the end of June and there are no hearings presently scheduled for these post-confirmation Debtors.
As was the case in respect of their first request for extended exclusive time, the Debtors cite delays in respect of regulatory approvals; with “unforeseen delays in processing the Debtors’ applications with certain of the regulatory agencies” now exacerbated by continued trading in claims which has resulted in “an additional holder of Claims that will be entitled to receive more than ten (10) percent of the equity interests in the Reorganized Debtors upon the Effective Date. Consequently, the Debtors now are required to re-submit or amend certain applications that previously were filed…”
On October 31, 2021, GTT Communications, Inc. and nine affiliated debtors (“GTT” or the “Debtors”) filed for Chapter 11 protection noting estimated assets of $2.8bn; and estimated liabilities of $4.1bn ($2.015 of funded debt). At filing of their prepackaged Plan, the Mclean, Virginia-based provider of global network connectivity and internet services, noted that their aggressive acquisition strategy had led to unsustainable debt servicing obligations as compounded by the discovery of accounting irregularities and subsequent senior debt/bond defaults.
On December 13, 2021, the Debtors filed a Third Modified Prepackaged Plan which was confirmed by the Court on December 16, 2021.
The Extension Motion
The extension motion [Docket No. 517] states, “Since the commencement of these prepackaged Chapter 11 Cases, the Debtors have made substantial progress toward consummating the proposed Restructuring Transactions contemplated by the Plan and receiving many of the regulatory approvals necessary to emerge from these Chapter 11 Cases. To date, the Debtors have received many, but not all, of the regulatory approvals required to emerge from these Chapter 11 Cases. Thus, out of an abundance of caution, the Debtors are seeking a further extension of their exclusive periods to file and solicit a chapter 11 plan.
The Debtors’ receipt of the regulatory approvals required to emerge from these Chapter 11 Cases has been delayed due to a number of factors beyond the Debtors’ control. Specifically, the Debtors do not control the approval processes and are subject to the schedules of the applicable regulatory agencies; unfortunately, there have been unforeseen delays in processing the Debtors’ applications with certain of the regulatory agencies.
Additionally, as a result of recent trading of U.S. Term Loans and Original EMEA Term Loans, there is now an additional holder of Claims that will be entitled to receive more than ten (10) percent of the equity interests in the Reorganized Debtors upon the Effective Date. Consequently, the Debtors now are required to re-submit or amend certain applications that previously were filed with (and, with respect to many jurisdictions, approved by) various federal and state regulatory agencies. These additional submissions and amendments may delay the Debtor’s receipt of certain regulatory approvals required to emerge from these Chapter 11 Cases.
The Debtors’ exclusive period to file a chapter 11 plan currently expires on June 28, 2022. Therefore, although the Plan has been confirmed, given the remaining regulatory approvals necessary for the Plan to go effective, the Debtors seek to extend the Exclusive Periods (as defined herein) solely out of an abundance of caution in the event unforeseen issues arise prior to emergence. Maintaining the status quo at this critical juncture is of utmost importance as the Debtors and their stakeholders work towards consummating the Plan, which maximizes the value of the Debtors’ estates and was unanimously supported by the Debtors’ impaired creditors that voted on the Plan. The Debtors submit that a 95-day extension of the Exclusive Periods is therefore appropriate to protect the value and consensus that has been built by the Debtors and their stakeholders and will not prejudice any party in interest.”
A hearing on the extension motion is scheduled for July 20, 2022, with objections due by July 13, 2022.
About the Debtors
According to the Debtors: “GTT provides secure global connectivity, improving network performance and agility for your people, places, applications and clouds. We operate a global Tier 1 internet network and provide a comprehensive suite of cloud networking and managed solutions that utilize advanced software-defined networking and security technologies. We serve thousands of businesses with a portfolio that includes SD-WAN and other WAN
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