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Windstream heads to bankruptcy court after losing legal fight


Windstream Holdings Inc., the rural broadband provider that bought Iowa Telecommunications Services Inc., filed for bankruptcy protection today after losing a legal battle with hedge fund Aurelius Capital Management, the Wall Street Journal reported. Windstream’s Chapter 11 filing is the culmination of an 18-month legal fight between the telecom company and Aurelius, which had argued a 2-year-old spinoff of the company’s fiber-optic cable network violated the covenants on one of its bonds. Aurelius argued those covenants prohibited the company from engaging in sale-leaseback transactions. Two weeks ago, a federal judge ruled that Windstream violated the covenant on sale-leaseback transactions and awarded the hedge fund a judgment of $310 million plus interest.

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