FairPoint Communications 2009 Annual Report Download - page 111

Table of Contents
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
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The Company received approval from the Bankruptcy Court to pay or otherwise honor certain of its pre-petition obligations, including employee
related obligations such as accrued vacation and pension related benefits. As such, these obligations have been excluded from liabilities subject to
compromise as of December 31, 2009.
Reorganization Items
Reorganization items represent expense or income amounts that have been recognized as a direct result of the Chapter 11 Cases and are presented
separately in the consolidated statements of operations pursuant to the Reorganizations Topic of the ASC. Such items consist of the following (amounts
in thousands):
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Liabilities subject to compromise refer to liabilities incurred prior to the Petition Date for which the Company has not received approval from the
Bankruptcy Court to pay or otherwise honor. The amounts of the various categories of liabilities that are subject to compromise are set forth below.
These amounts represent the estimates of known or potential pre-Petition Date claims that are likely to be resolved in connection with the Chapter 11
Cases. Such claims remain subject to future adjustments. Adjustments may result from negotiations, actions of the Bankruptcy Court, rejection of the
executory contracts and unexpired leases, the determination of the value securing claims, proofs of claim or other events.
101
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Non-cash debt adjustments(a) $ 33,680
Non-cash interest rate swap adjustments(b) 10,284
Professional fees(c) 8,365
Employee retention(d) 689
 $ 53,018
(a) This amount includes the write-off of $23.8 million of deferred financing costs on the Pre-petition Credit Facility
and $9.9 million of discount on the Notes in order to adjust the carrying amount of the debt to the Bankruptcy
Court approved amount of the allowed claims for the debt.
(b) The carrying value of the Swaps was adjusted to the termination value of the Swaps, as determined by the
respective counterparties to the Swaps. The termination of the Swaps resulted from the filing of the Chapter 11
Cases.
(c) Professional fees relate to legal, financial advisory and other professional costs directly associated with the
reorganization process.
(d) Employment retention represents charges incurred relating to the execution of retention agreements with certain
executives in accordance with the plan of reorganization.