Sunday, November 30, 2008

Hawaiian Telcom Files for Chapter 11

Hawaiian Telcom, the incumbent local exchange carrier (ILEC) in Hawaii, has filed for Chapter 11 bankruptcy protection.

The company is seeking relief to enable it to continue to operate its business without interruption to customers, employees and other critical constituents. The requests to the Bankruptcy Court include authority to honor all customer programs such as discounts and rebates, to continue to pay wages and salaries, and to continue various benefits for employees. In addition, the Company will seek authority to use its existing cash collateral to fund operations.

Hawaiian Telcom said its actions are a result of increased competition in an ever-evolving communications industry, an
inability to satisfy its capital expenditure needs while continuing to meet its debt service requirements, a significant
downturn in the economy, as well as the difficulties in the transition of certain back office functions from Verizon
following the 2005 acquisition.