FairPoint Communications 2013 Annual Report Download - page 74

72
to report, in one place, information about reclassifications out of accumulated other comprehensive income. In addition, it also
requires companies to report changes in accumulated other comprehensive income balances. This new guidance was to be applied
prospectively and was effective for interim and annual periods beginning after December 15, 2012, with early adoption permitted.
The Company adopted this ASU during the quarter ended March 31, 2013 and it did not have a material impact on the Company's
consolidated financial statements.
In July 2013, the FASB issued ASU 2013-11, which is designed to reduce diversity in practice of financial statement
presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward
exists. This new guidance becomes effective for the Company on January 1, 2014 and the Company does not expect it to have a
material impact on its consolidated financial statements.
(4) Reorganization Under Chapter 11
Emergence from Chapter 11 Proceedings
On October 26, 2009 (the "Petition Date"), the Company and substantially all of its direct and indirect subsidiaries filed
voluntary petitions for relief under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code" or "Chapter 11") in
the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court"). The cases were being jointly
administered under the caption In re FairPoint Communications, Inc., Case No. 09-16335 (the "Chapter 11 Cases"). On January 13,
2011, the bankruptcy judge entered into an order dated as of December 29, 2010 (the "Confirmation Order") confirming the
Company's Third Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code (as confirmed, the "Plan")
and on January 24, 2011 (the "Effective Date") the Company emerged from Chapter 11 protection.
On the Effective Date, the Company substantially consummated its reorganization through a series of transactions
contemplated by the Plan and the Plan became effective pursuant to its terms.
The Plan provided for, among other things:
(i) the cancellation and extinguishment on the Effective Date of all of the Company's equity interests outstanding on or
prior to the Effective Date, including but not limited to all outstanding shares of the Company's common stock, par
value $0.01 per share, options and contractual or other rights to acquire any equity interests,
(ii) the issuance of shares of the Company's new common stock, par value $0.01 per share, and the issuance of warrants
to purchase shares of the Company's common stock to holders of certain claims in connection with a warrant agreement
that the Company entered into with The Bank of New York Mellon, as the warrant agent, on the Effective Date (the
"Warrant Agreement"), in accordance with the Plan,
(iii) the satisfaction of claims associated with
(a) the credit agreement, dated as of March 31, 2008, by and among FairPoint Communications, Spinco, Bank of
America, N.A., as syndication agent, Morgan Stanley Senior Funding, Inc. and Deutsche Bank Securities Inc., as
co-documentation agents, and Lehman Commercial Paper Inc., as administrative agent, and the lenders party
thereto (as amended, supplemented or otherwise modified from time to time, the "Pre-Petition Credit Facility"),
(b) the 13-1/8% Senior Notes due April 1, 2018 (the "Old 13-1/8% Notes"), which were issued pursuant to the indenture,
dated as of March 31, 2008, by and between Spinco and U.S. Bank National Association, as amended, and
(c) the 13-1/8% Senior Notes due April 2, 2018 (the "New 13-1/8% Notes" and, together with the Old 13-1/8% Notes,
the "Pre-Petition Notes"), which were issued pursuant to the indenture, dated as of July 29, 2009, by and between
FairPoint Communications and U.S. Bank National Association and
(iv) the termination by its conversion into the Old Revolving Facility (as defined herein) of the Debtor-in-Possession Credit
Agreement, dated as of October 27, 2009 (as amended, the "DIP Credit Agreement"), by and among FairPoint
Communications and FairPoint Logistics, Inc. ("FairPoint Logistics"), certain financial institutions and Bank of
America, N.A., as the administrative agent.
The Company's common stock began trading on the Nasdaq Stock Market LLC on January 25, 2011. In addition, on the
Effective Date, FairPoint Communications and FairPoint Logistics (collectively, the "Old Credit Agreement Borrowers") entered
into a $1,075.0 million senior secured credit facility with a syndicate of lenders and Bank of America, N.A., as the administrative
agent for the lenders, arranged by Banc of America Securities LLC (the "Old Credit Agreement") comprised of a $75 million
revolving facility (the "Old Revolving Facility") and a $1.0 billion term loan facility (the "Old Term Loan", and together with the
Old Revolving Facility, the "Old Credit Agreement Loans").
In connection with the Chapter 11 Cases, the Company also negotiated with representatives of the state regulatory authorities
in Maine, New Hampshire and Vermont with respect to (i) certain regulatory approvals relating to the Chapter 11 Cases and the