Windstream may be headed for bankruptcy -- or at least back to court to prevent it -- following a court ruling late Friday that said the company defaulted on its debts in 2015.

At issue was whether the carrier's bond provisions allowed it to spin off its Windstream Services subsidiary into a real estate investment trust (REIT) called Uniti Group -- a transaction that happened in 2015.

Light Reading reported on Windstream's plan back then. The carrier wanted to put its physical network assets -- like its copper and fiber distribution networks -- into a REIT, with the communications service providers using those assets as "tenants." The arrangement would give Windstream a way to reduce its debt, cut its dividend and, the company said, move more quickly to expand its broadband footprint.

The hedge fund Aurelius Capital Management, a major holder of Windstream bonds, said that Windstream violated the condition of its bonds by forming the REIT.

If the courts agree, the violation of the bond indentures that Aurelius has called out would trigger a provision in the bond that makes the entire amount of the note, plus interest, due immediately.

Unless it wins in appeal, Windstream could be stuck owing more than $310 million. Windstream, which has more than 1,000 SD-WAN corporate customers and more than 1.4 million residential and small business broadband users, has a market capitalization of about $144.7 million as of Friday afternoon.

The ruling spells it out: "And given that, Aurelius is entitled to a money judgment in the amount of the Notes it holds plus interest. That figure, about which there is no dispute, is $310,459,959.10, with an additional $61,347.50 per day in interest after July 23, 2018."

US markets are closed today, but when they open on Tuesday, Windstream shares may be in for a ride. In a press release issued this afternoon, Windstream said it was postponing the previously scheduled Feb. 21 release of its financial results because of the ruling. The company also said it is "continuing to evaluate its options, including post-trial motions and an appeal," and now expects to release its fourth-quarter and full-year results "no later than March 18."

Windstream shares closed on Friday up $0.21 (6.65%) to $3.37 each. In after-hours trading on Friday evening, the company's shares had fallen $1.92 (56.97%) to $1.45 each.

Shares of Uniti, the REIT that Windstream formed, closed up $0.51 (2.62%) to $19.98 in regular trading, and then quickly fell $5.99 (29.98%) to $13.99 in after-hours trading on Friday.

Related links:

— Phil Harvey, US Bureau Chief, Light Reading