The U.S. Securities and Exchange Commission (“SEC” or “Commission”), the federal agency responsible for enforcement of the federal securities laws, objects to approval of the Disclosure Statement and confirmation of the Chapter 11 Plan of Frontier Communications Corporation and its affiliated debtors dated May 14, 2020. In support of its limited objection, the Commission respectfully states as follows:
* In the SEC’s view, the Releases here are not consensual because the Plan deems consent to the Releases to be established based on silence or a failure to opt out. In the SEC’s view, all creditors and interest holders should be required to affirmatively opt-in to the Releases in order to be bound by them.
* The Releases violate public policy by preventing investors from pursuing legitimate claims against wrongdoers.
* The Court lacks jurisdiction to approve the Releases. The bankruptcy court may lack both constitutional authority and statutory jurisdiction to bind Frontier’s creditors and shareholders under Section 1141, or any other bankruptcy provision, to the Releases.
* The SEC requests that the Court deny approval of the Disclosure Statement and confirmation of the Plan unless the Plan is amended.
A full-text copy of SEC’s objection to plan and disclosure dated June 21, 2020, is available at https://tinyurl.com/ya7xko8r from PacerMonitor at no charge.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
200 Vesey St., Suite 400
New York, New York 10281
Phone: (212) 336-1100
About Frontier Communications
Frontier Communications Corporation (NASDAQ: FTR) offers a variety of services to residential and business customers over its fiber-optic and copper networks in 29 states, including video, high-speed internet, advanced voice, and Frontier Secure digital protection solutions.
Frontier Communications Corporation and 103 related entities sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-22476) on April 14, 2020. Judge Robert D. Drain oversees the cases.
The Debtors tapped Kirkland & Ellis LLP as legal counsel; Evercore as financial advisor; and FTI Consulting, Inc., as restructuring advisor. Prime Clerk is the claims agent, maintaining the page http://www.frontierrestructuring.com/ and https://cases.primeclerk.com/ftr
The U.S. Trustee for Region 2 appointed a committee to represent unsecured creditors in Debtors’ Chapter 11 cases.