FairPoint Communications 2009 Annual Report Download - page 44

Table of Contents
•our ability to comply with the covenants under the DIP Credit Agreement; and
•our ability to maintain contracts and leases that are critical to our operations.
These risks and uncertainties could affect our business and operations in various ways. For example, negative events or publicity associated with
the Chapter 11 Cases could adversely affect our revenues and the relationship with our customers which in turn could have a material adverse effect on
our business, financial condition, results of operations and liquidity, particularly if the Chapter 11 Cases are unexpectedly protracted. In addition, for the
duration of the Chapter 11 Cases, transactions outside the ordinary course of business are subject to the prior approval of the Bankruptcy Court, which
may limit our ability to respond timely to certain events or take advantage of certain business opportunities.
Furthermore, as a result of the Chapter 11 Cases, realization of assets and liquidation of liabilities are subject to uncertainty. While operating as a
debtor-in-possession under the protection of the Bankruptcy Code, we may sell or otherwise dispose of assets and liquidate or settle liabilities for
amounts other than those reflected in our financial statements, subject to Bankruptcy Court approval or otherwise as permitted in the normal course of
business. Further, a Chapter 11 plan of reorganization could materially change the amounts and classifications reported in our consolidated historical
financial statements, which do not give effect to any adjustments to the carrying value of assets or amounts of liabilities that might be necessary as a
consequence of confirmation of a Chapter 11 plan of reorganization and the discharge of such liabilities.
Because of the risks and uncertainties associated with the Chapter 11 Cases, the ultimate impact of events that occur during these proceedings on
our business, financial condition, results of operations and liquidity cannot be accurately predicted or quantified. Additionally, the Plan will result in
cancellation of our common stock, which is expected to cause an investment in the Company to become worthless.
In light of the foregoing, trading in our securities during the Chapter 11 Cases is highly speculative and poses substantial risks. Holders of our
securities may have their securities cancelled and in return receive no payment or other consideration, or a payment or other consideration that is less
than the par value or the purchase price of such securities.

A long period of operations under Bankruptcy Court protection could have a material adverse effect on our business, financial condition, results of
operations and liquidity. So long as the Chapter 11 Cases continue, our senior management will be required to spend a significant amount of time and
effort dealing with the reorganization instead of focusing exclusively on our business operations. A prolonged period of operating under Bankruptcy
Court protection may also make it more difficult to retain management and other key personnel necessary to the success and growth of our business. In
addition, the longer the Chapter 11 Cases continue, the more likely it is that our customers and suppliers will lose confidence in our ability to
successfully reorganize our businesses and seek to establish alternative commercial relationships.
Furthermore, so long as the Chapter 11 Cases continue, we will be required to incur substantial costs for professional fees and other expenses
associated with the administration of the Chapter 11 Cases. A prolonged continuation of the Chapter 11 Cases may also require us to seek additional
financing. If we require additional financing during the Chapter 11 Cases and we are unable to obtain the financing on favorable terms or at all, our
chances of successfully reorganizing our business may be seriously jeopardized, and, as a result, any securities in the Company could become further
devalued or become worthless.
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