Restructuring of Fusion Connect, Inc.
6/5/2019

Davis Polk is advising an ad hoc group of lenders under Fusion Connect, Inc.’s prepetition secured first-lien credit facility in the chapter 11 restructuring of Fusion Connect, Inc. and certain of its subsidiaries (collectively, “Fusion”).

On June 3, 2019, the ad hoc group and Fusion entered into a restructuring support agreement, which contemplates a dual-track restructuring pursuant to which Fusion will conduct a marketing and potential sale process of its United States and/or Canadian business while simultaneously seeking confirmation of a debt-to-equity restructuring in which the first-lien lenders will receive 100% of the common stock of the reorganized Fusion and a take-back term loan, in the event that a value-maximizing sale transaction cannot be effectuated. The restructuring support agreement is supported by more than 67% of the prepetition first-lien lenders. On June 3, 2019, Fusion filed its voluntary chapter 11 petitions in the United States Bankruptcy Court for the Southern District of New York.

Pursuant to the restructuring support agreement, the ad hoc group of lenders also backstopped Fusion’s debtor-in-possession financing facility in the aggregate principal amount of $59.5 million, which consists of $39.5 million of new money term loans. 

Fusion, a leading provider of integrated cloud solutions to businesses of all sizes, is the industry’s Single Source for the Cloud. Fusion's advanced, proprietary cloud services platform enables the integration of leading edge solutions in the cloud, including cloud communications, contact center, cloud connectivity and cloud computing. Fusion also provides residential telecommunications services to customers in Canada.

The Davis Polk restructuring team includes partner Damian S. Schaible and associates Christopher Robertson, Adam Shpeen, Omer Netzer and Xu Pang. The finance team includes partners Jinsoo H. Kim and Jeong M. Lee, counsel Christian Fischer and Benjamin Cheng and associate Brittany Taylor. All members of the Davis Polk team are located in the New York office.

Greenhill & Co, LLC is acting as financial adviser and Wiley Rein LLP is acting as regulatory counsel to the ad hoc group of lenders.