I believe Alan Masarek knows & it was stated in yesterday's post by Dave Michels that filing Chapter 11 will impact attitudes, morale, & loyalty w/ employees, partners, & customers. It was also stated in the Credit Sights report that Alan strongly believes that their are DANGERS in Chapter 11 due to costs to file ($140M spent in fees from prior BK), business disruption (I.e. customer defections), & continued uncertainry leading to shorter contracts & delayed customer conversion to the cloud.
Additionally, his strongest partner, RingCentral, will have lost money & faith as Alan & Vlad had agreed in principle on a new deal w/ the expectation that a capital restructuring would be complete.
And lastly, Alan & Apollo must know that if/when they file Chapter 11, they will be immediately served & inundated with Class Action & potentially personally liable lawsuits that will cost time & a lot of money to defend. (And likely lose)
IF Avaya & the Lenders (Apollo) agree to restructure, ALL THIS GOES AWAY. And being that we are talking about the remaining $221M of June 2023 notes and the remaining Debt doesn't mature until Dec 2027, it just doesn't make sense or seem in the best interest of Avaya or their Lenders (Including Apollo) to file Chapter 11. The Avaya Business Update provided last week provides the roadmap on the financing through FY 2027 which ends in October.
And with the fact that the Federal Gov't is already investigating Apollo for questionable business practices, you'd think they'd want to resolve this through any means necessary besides Chapter 11. (My two cents)