Windstream Holdings said Monday it has exited Chapter 11 after cutting the majority of its debt and locking in new capital that puts the company in a position to invest in network and software and pursue a plan for sustainable growth.

Windstream also marked the occasion with the launch of a new logo.

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Windstream filed for a voluntary Chapter 11 reorg in February 2019 following a court ruling that found the company had defaulted on its debts in 2015. Tied to that, hedge fund Aurelius Capital Management was awarded a judgment of $310 million, plus interest of up to $61,000 per day.

The whole messy situation stemmed from an issue about whether Windstream's bond provisions allowed it to spin off a subsidiary, called Windstream Services LLC, into a real estate investment trust (REIT) called Unity Group back in 2015. That plan centered on Windstream putting its physical network assets, including its fiber networks, into a REIT, with service providers using those assets as "tenants."

Windstream thought the move could reduce debt and accelerate the expansion of its broadband footprint, but Aurelius, a significant holder of Windstream bonds, argued that Windstream's formation of the REIT violated the conditions of its bonds.

When it filed under Chapter 11 some 18 months ago, Windstream was able to lock in about $1 billion in debtor-in-possession financing from Citigroup Global Markets to support business operations.

Fast-forwarding to today, Windstream said it had exited the process as a privately held company, noting that it has chopped its debt by more than $4 billion – or about two-thirds – and now has access to $2 billion in new capital.

"With the completion of our financial restructuring, we now have an enhanced balance sheet and a robust capital investment program to expand 1 Gig Internet service in rural America and maintain our product and software leadership in SD-WAN and UCaaS [Unified communications as a service] for enterprise customers," Tony Thomas, Windstream's president and CEO, said in a statement.

Windstream's strategic partnership with Uniti Group will continue, he added.

Windstream said it will push forward with an Enterprise unit focused on areas such as SD-WAN and UCaaS, and a Wholesale unit focused on "digital transformation in optical transmission."

The consumer end of the business will continue on under the "Kinetic" brand and feature broadband service (up to 1 Gbit/s in some areas) along with pay-TV and home network security options.

Windstream has been pushing other projects during the reorg period, including the selection of Ciena for a new nationwide network called NCON (National Converged Optical Network), the completion of a wholesale data services agreement with the National Cable Television Cooperative, a group that represents hundreds of independent cable operators and telcos, and a partnership with YouTube TV.

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— Jeff Baumgartner, Senior Editor, Light Reading