Frontier Communications, Minnesota’s second-largest landline phone-service provider, has filed for Chapter 11 bankruptcy, though the company said it will continue honoring terms of a settlement with state regulators over poor service quality.
Connecticut-based Frontier late Tuesday filed Chapter 11, which allows a company to reorganize its finances while being shielded from creditors’ claims and litigation.
Frontier has lost money in each of the last five years, posting a $5.9 billion loss in 2019 alone.
The Minnesota Public Utilities Commission (PUC) in October approved a legal settlement aimed at remedying Frontier Communications’ multitude of telephone network failings.
The settlement between the Minnesota Department of Commerce and Frontier calls for refunds for aggrieved customers and establishes a framework to deal with any future Frontier phone service problems and maintenance breakdowns. Earlier this week, the Commerce Department announced that current and former Minnesota customers of Frontier have until July 20 to request rebates and credits from the carrier. The company said the bankruptcy won’t affect the settlement.
“Frontier made a commitment in the service quality settlement approved by the Minnesota PUC, and the company has been working to meet and comply with the settlement obligations and will continue to do so,” said Ken Mason, Frontier’s senior vice president for regulatory affairs, in a statement
Frontier said phone and internet service to customers will continue as usual.
Frontier’s Chapter 11 is what is known as a prepackaged filing. The company said it already has a restructuring agreement with 75% of the holders of $11 billion in unsecured bonds. Trade creditors are expected to be paid in full, Frontier said.
Frontier, which also operates under the name Citizens Communications, has 90,000 to 100,000 customers in Minnesota, many in rural northeastern and southern parts of the state. CenturyLink is Minnesota’s largest landline carrier with over 400,000 customers.
The PUC began looking into Frontier in 2018 after hearing from scores of customers about poor service. The PUC commissioned an inquiry by the Commerce Department, which led to a scathing report on Frontier and ultimately a settlement.
The settlement stipulated that Frontier phone customers could obtain credits or refunds for some types of complaints as far back as March 1, 2015, through Oct. 31, 2018. Other types of credits start with complaints that occurred after Jan. 1, 2017.
The 90-day settlement claim period started Monday and goes through July 20, the Commerce Department said. Thousands across the state could receive rebates or bill credits, said Commerce Commissioner Steve Kelley. “Current and former Frontier customers should review the settlement categories soon to see if they qualify.”
The department said that applications for refunds or bill credits have been mailed to Frontier customers and are also available online at https://frontier.com/forms/minnesota-bill-credit.
Attorney General Keith Ellison said his office’s investigation into Frontier’s business practices also will continue.