Explain like I’m 5 years old. What did Windstream do to have this judgement ruled against them?
3 replies (most recent on top)
Tony Thomas was the CFO when Uniti was spun off.
Things that make you go hmmmmm .......
There was (keyword was) a substantial tax Dodge if you put your real estate into a REIT or Real Estate Investment Trust. Enough that the tax saving along would make a substantial business even if the new company or REIT assumes the debt of the leasee here being Windstream. Well Windstream wanting to play with the big boys hopped on this like stink on sh!t however Congress enclosed the loop hole in mid 2106 so it was all for not, but anyways.... So Windstream spun off all of its physical assets to Uniti or CS&L at this time. Not for free of course. CS&L took a series of bonds to pay Windstream for the assets on a business plan of leaseing the real estate back to them. Realestate here being the fiber and copper in the ground, easements, dark fiber IRU, etc. So Windstream took the money from CS&L /Uniti and payed off some of its maturing bond holdings. Well they didn't read the fine print on the covenant of that bond as it stated it could not be payed off by money via an asset sale. Becuase if you sale your assets you are casuing the total value of your business to lower, and in this case you are paying someone else (600 million /yr or 150ish million a quarter) for your own damn outside plant.... so thus law suit saying Windstream defaulted on this bond.
Their CEO built a Ponzi Scheme to fraud investors and employees.