Once a high-flying Fortune 500 concern with revenues exceeding $6 billion, Windstream Holdings Inc. will be delisted from the Nasdaq Stock Market March 6, only days after seeking Chapter 11 bankruptcy protection, according to an 8K filing Friday (March 1) with the U.S. Securities & Exchange Commission (SEC).
Windstream announced Monday (Feb. 25) its holding company and subsidiary, Windstream Services LLC, had filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. Chapter 11 bankruptcy allows a business to file a reorganization plan for its debt over a 120-day period.
In the SEC filing, Windstream officials said the company received a letter from the listing qualifications department staff of the Nasdaq Stock Market on the same day the publicly-traded rural broadband operator filed for bankruptcy protection. In the letter, Nasdaq officials notified the Little Rock telecom the company’s stock would be removed from the tech-focused trading exchange on March 6 due to Monday’s Chapter 11 bankruptcy filing.
Under Nasdaq rules, unless Windstream requests an appeal of the determination, trading of the company’s common stock will be suspended at the opening of business in the mid-week session. Once the Windstream stock is halted, it will then be removed from Nasdaq’s listing and registration.
“The company does not intend to appeal the determination and, therefore, it is expected that the common stock will be delisted,” Windstream said in the SEC filing.
When Alltel first spun off its wireline subsidiary and merged that business into VALOR Communications Group Inc. on July 17, 2006, Arkansas’ newest publicly traded concern named Windstream Corp. began trading its common stock on the New York Stock Exchange under the symbol WIN.
Windstream voluntarily moved its stock exchange listing to the Nasdaq Global Select Market on Dec. 10, 2009, under the same stock symbol.
“Our switch to Nasdaq exemplifies our continued focus on shareholder value. We believe Nasdaq’s innovative trading platform and cost-effective services will provide increased value to both Windstream and our shareholders,” Rob Clancy, the company’s former treasurer who later took a position with Windstream’s spin-off, Uniti Corp, said at the time.
That bankruptcy filing was precipitated by a Feb. 15 court ruling by U.S. District Judge Jesse Furman for the Southern District of New York that Windstream violated bond agreements after splitting off Arkansas’ first publicly held real estate investment trust in April 2015. That company was formerly known by the bulky name of Communications Sales & Leasing, but changed its name to Uniti Corp. exactly two years ago.
That federal lawsuit against Windstream arose from challenges by Aurelius Capital Management and U.S. Bank National Association that the Uniti spinoff was invalid under the terms of a debt exchange offer and consent solicitations in respect to senior notes issued by the Arkansas telecom to fund the deal. The court in its ruling awarded Aurelius and the other winning parties a $310 million judgment.
Since that federal lawsuit, a series of rapid-fire events pushed Windstream into bankruptcy and sent shares in both Arkansas companies plummeting to 52-week lows. On Friday, Windstream’s stock had fallen into penny stock territory, closing the week down 6.9% at only 37 cents per share. The company’s stock has fallen nearly 90% since the fateful judgment by the Manhattan-based federal court.
Windstream said it now expects to trade its penny stock over the counter on the OTC Bulletin Board, or “pink sheets.” Those shares will begin trading under the symbol WINQ, on the same day it is delisted from the Nasdaq.
“The transition does not affect Windstream’s operations and does not change reporting requirements under SEC rules,” the company said.
The rapid series of events over the past two weeks also led Windstream and Uniti to postpone their respectively fourth quarter and yearly financial results to assess the impact of the Chapter 11 petition by Windstream. Both companies have since rescheduled their year-end financial results for no later than March 18.
Windstream has also received approvals from the federal bankruptcy court in New York to access up to $400 million of its $1 billion in debtor-in-possession financing, along with ongoing cash flow, to meet Windstream’s operational needs and continue “business as usual.”