PURA Dismisses Frontier’s Change of Control Application Press Release
Petition stems from companies’ chapter 11 bankruptcy proceeding
Connecticut’s Public Utilities Regulatory Authority (PURA) announces today the issuance of an Interim Decision in which it dismisses, without prejudice, an application filed by Frontier Communications Corporation and its subsidiaries (Frontier Companies) seeking approval for a new holding company structure. According to the application, the new holding company structure would put into motion the Frontier Companies’ draft plan of reorganization filed under chapter 11 of the Bankruptcy Code.
On April 14, 2020, the Frontier Companies commenced a chapter 11 proceeding in the United States Bankruptcy Court for the Southern District of New York. PURA has since intervened in the bankruptcy proceeding to safeguard Connecticut customers’ investment and interests in The Southern New England Telephone Company (SNET) – a Frontier subsidiary.
On April 30, 2020, PURA initiated its own proceeding, Docket Number 20-04-31, to monitor the bankruptcy proceeding’s ramifications on SNET customers and to receive and consider any related regulatory applications. The Frontier Companies submitted an application (Application) to PURA on May 22, 2020 to approve a new holding company structure, which today’s Interim Decision addresses. Importantly, the submission of the Application triggered a statutory decision deadline of one hundred and twenty days from its receipt.
After careful review and consideration, PURA determined that the draft plan of reorganization presented in the Frontier Companies’ Application is preliminary in nature and subject to change, thus rendering the change of control Application ultimately not yet ripe for PURA’s consideration. PURA determined that the Frontier Companies would not face unreasonable or additional hardship if a change of control proceeding were to be postponed.
PURA Chairman Marissa P. Gillett commented, “PURA intends to remain a vigilant participant in the federal bankruptcy proceeding to ensure that our customers remain at the forefront of these important negotiations. In Connecticut, we stand ready to review any bankruptcy-related application for change of control submitted by Frontier, but we will not be prematurely committed to a situation where there is a statutory decision
deadline when the underlying agreement remains in draft form. The burden is on the company to demonstrate that the application is ready for our review.” As noted in the Interim Decision, the record in Docket Number 20-04-31 will remain open so that the Frontier Companies may re-file the application at a later date.