Hawaiian Telcom Files Chapter 11

HONOLULU -- Hawaiian Telcom Communications, Inc. (“the Company”), today announced that to continue its balance sheet restructuring process and ensure the Company’s long-term financial health, it has filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware in Wilmington. The Company will continue to operate its business without interruption.

As is standard in such cases, Hawaiian Telcom is seeking relief from the Court that will enable it to continue to operate its business without interruption to customers, employees and other critical constituents. The requests include authority to honor all customer programs such as discounts and rebates, to continue to pay wages and salaries, and to continue various benefits for employees. In addition, the Company will seek authority to use its existing cash collateral to fund operations.

“Our decision to restructure through a Chapter 11 filing allows the Company to reduce its level of debt and reorganize its business, so we can emerge a stronger and more financially secure company better able to compete in the ever-changing communications industry. I strongly believe that the filing provides the right course of action to support what is in the best interests of our customers, employees, suppliers and other valued constituents,” said Eric K. Yeaman, Hawaiian Telcom’s president and chief executive officer.

“Hawaiian Telcom has proudly served the communications needs of Hawaii’s local community for over 125 years and our dedication to providing our customers with the best quality service remains the Company’s highest priority going forward,” continued Yeaman. As previously disclosed, the Company has been working with its creditors since October on a balance sheet restructuring that would be amenable to all parties while protecting the interests of the Company’s customers, employees and other constituents. After careful consideration, Hawaiian Telcom determined that a Chapter 11 filing provided the best means to restructure its debt with minimal impact to the business.

Hawaiian Telcom’s actions are a result of increased competition in an ever-evolving communications industry, an inability to satisfy its capital expenditure needs while continuing to meet its debt service requirements, a significant downturn in the economy, as well as the difficulties in the transition of certain back office functions from Verizon following the 2005 acquisition.

Hawaiian Telcom Communications Inc.