Friday ended poorly for Windstream and well for the hedge fund Aurelius Capital Management. A Manhattan federal court has ruled against the service provider, and if the judgement holds up then the company might be facing a date with BK.
At the crux of the issue is Windstream's spinoff of its fiber and copper assets into the company that is now Uniti Group in 2015. Aurelius has contended that by doing that the company defaulted on its bonds, and a judge has now agreed. The price tag is not minor: $310M.
It's not over yet of course, there are still appeals ahead I'm sure. But the stock isn't taking it well in extended trading. Just how it will all turn out in the end is unclear, but operationally nothing will change much any time soon.
Windstream has been making significant strides in leveraging the assets it spun off and leased back from Uniti, investing in new routes and improving its wholesale and enterprise business. Hopefully the financial and legal issues won't derail that progress too badly.