https://www.barrons.com/articles/aurelius-hedge-fund-stake-windstream-holdings-spinoff-uniti-group-elliot-capital-51559589062
"After all that."
"An ugly court battle resulted in a corporate bankruptcy earlier this year, and now the hedge fund at the center of it has bought a stake in the spinoff of the company it bankrupted."
Aurelius is an expert on the legal technicalities of the lease. They appear to be betting on Uniti.
“BS...All Windstream needs to is reject the MLA. ”
Yes, but wouldn’t that be the end of Windstream, too? If Windstream stopped making payments, Uniti would be in trouble. They’d declare bankruptcy, too.
But look at their expenses. Pretty much all interest. That would be stayed by bankruptcy. I think I read somewhere they have <100 employees.
The first thing they’d do is start leasing out the CLEC’s most attractive cables to Windstream competitors.
Regulatory agencies would have a fit with the ILEC. They’d force that side of the house to find a way to lease the lines anyway.
Windstream is better off not rejecting the lease but somehow getting it deemed not valid. At that point, they’re in this shadowy got a lease/ don’t gotta lease. They’re no longer bound by the lease terms.
Go skim the itemized April bill from Windstream’s investment bankers, PJT, searching on the term “Uniti”.
http://www.kccllc.net/windstream/document/1922312190625000000000109
You’ll see a reference to a PowerPoint presentation (slide deck) that has a title along the lines of “no deal”. (I’m working from memory here).
It’s all a big game of chicken on both companies’ part but I think under bankruptcy law, Uniti has a stronger hand.
That said, I’m not a lawyer - this is my amateur analysis. Real lawyers (and smart laymen) feel free to correct me!
BS...All Windstream needs to is reject the MLA. Once UNIT realizes, income stops but maintenance and tax expenditures kick in by the endibg of the ludicrous triple net lease not only will they blink, the will cave. problem is collusion between both Boards and the gunderman bros and TT
"Windstream is backed into a corner and has to pay whatever Uniti demands."
Windstream's payments are governed by the lease agreement. Uniti has to honor it.
“Uniti could enter wholesale and cut Windstream off.”
Yes, but…
Windstream has a long-term lease on those cables. Unless Windstream gives up the lease, nobody else can use any of the fibers - not even Uniti.
Uniti could enter wholesale and cut Windstream off. Everyone with solid rates in Windstream lit buildings.
Aurelius can get in a spot where they can drive up the lease costs for Windstream and bet against them yet again on credit default swaps. Windstream cannot go anywhere else other than Uniti for a lease. All their customers services run over the equipment and fiber they lease from Uniti. Windstream is backed into a corner and has to pay whatever Uniti demands. God forbid Aurelius gets a say in those lease payments, it would be the end of Windstream overnight.
"Aurelius is even more crooked than me" Tony Thomas
https://www.cnbc.com/2019/06/07/elliott-management-to-acquire-barnes-noble-for-683-million.html
Elliot is our dominant creditor. Could we be next?
You can't be mad for a vulture doing what vultures do. Aurelius isn't at fault for the trouble we are in. The management for this company put us in the position we are in. As the judge declared it's too cute by half.
Aurelius knows the Uniti lease and its legal technicalities better than anybody else at this point.
This suggests they believe Uniti is in a strong position to rebuff challenges to the lease from Windstream management or its creditors.
Wasn’t that the plan from the start??