A logo sign outside of a facility occupied by Avaya Inc., in Billerica, Massachusetts on August 14, 2016. (Photo: Tripplaar Kristoffer/SIPA)
In an effort to shed some of its $6.3 billion debt load, telecommunications equipment company Avaya Inc. filed for bankruptcy Thursday in New York.
Kirkland & Ellis restructuring partner Jonathan Henes in New York has taken the lead representing Avaya in a Chapter 11 case that was sent to U.S. Bankruptcy Judge Mary Kay Vyskocil—a former senior litigation partner at Simpson Thacher & Bartlett who took the bench last year—before being reassigned to U.S. Bankruptcy Judge Stuart Bernstein.
Avaya, which is saddled with debt stemming from an $8.2 billion buyout in 2007 by Silver Lake Partners LP and TPG Capital LP, met last year with creditors represented by Akin Gump Strauss Hauer & Feld and Stroock & Stroock & Lavan in an effort to ease its debt burden. Ropes & Gray represented the telecom company on its $915 million acquisition of the telephone unit of bankrupt Nortel Networks Inc. in 2009, as well as a $1 billion initial public offering in 2011.
The IPO for Avaya was ultimately abandoned, and the company’s private equity owners reportedly sought to sell the company to Oracle Corp. in 2013. That deal also never materialized, although Avaya did sell its former headquarters in northern New Jersey and shift its operations to Santa Clara, California, where the company remains based today.
Kirkland, which has close ties to Menlo Park, California-based Silver Lake, has not yet filed billing statements detailing its work for Avaya with the bankruptcy court in lower Manhattan. Amy Fliegelman Olli serves as senior vice president and general counsel for Avaya.
According to a list of Avaya’s 50 largest unsecured creditors, the company owes $736,377.49 to a trust account for Holland & Knight in McLean, Virginia. Stuart Mendelsohn, a real estate and land use partner with the firm in McLean named on that line item, did not immediately return a request for comment about the debt. An operations center opened by Holland & Knight last year in Tampa does share office space with Avaya and several other large companies, as noted by sibling publication the Daily Business Review.
Prime Clerk LLC, a bankruptcy claims administrator formed in 2013 by former Weil, Gotshal & Manges restructuring partner Shai Waisman, has been hired as a claims and noticing agent in Avaya’s Chapter 11 case.
The New Jersey Law Journal, a sibling publication, has reported on a long-running antitrust dispute between Avaya and Telecom Labs Inc. that has resulted in millions in legal fees, further weakening the company’s financial condition. In September, the U.S. Court of Appeals for the Third Circuit threw out a $60 million jury award against Avaya. Wilmer Cutler Pickering Hale and Dorr, Bryan Cave and Archer & Greiner have advised Avaya in the litigation.