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Otelco files for chapter 11 in order to implement its 'pre-packaged' financial restructuring plan
March 25, 2013
ONEONTA, Ala. -- Otelco Inc. (NASDAQ: OTT)(TSX: OTT.un), a wireline telecommunication services provider in Alabama, Maine, Massachusetts, Missouri, New Hampshire, Vermont and West Virginia, announced today that on March 24, 2013, the Company filed voluntary petitions for reorganization under chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. Otelco filed for chapter 11 in order to implement its "pre-packaged" financial restructuring plan - a plan that already has been accepted by 100% of the Company's senior lenders, as well as holders of over 96% in dollar amount of Otelco's senior subordinated notes who cast ballots. Otelco's restructuring plan will strengthen the Company by deleveraging its balance sheet and reducing its overall indebtedness by approximately $135 million. Otelco will maintain normal day-to-day business operations and continue to provide its customers with quality services throughout the restructuring. The Company's plan provides for suppliers and vendors to be paid in full during and after the restructuring process and for employees to continue to receive their usual pay and benefits. Because of the overwhelming support Otelco's plan has received from both its secured and unsecured creditors (including holders of the Company's IDS units), Otelco anticipates that the Company will be able to complete its financial restructuring at the end of the second quarter of 2013. Otelco Inc.
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