Creditors withdraw motion in FairPoint bankruptcy

AP News
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Posted: Nov 11, 2009 4:42 PM

Bondholders who are owed more than $550 million by FairPoint Communications Inc. have withdrawn a motion asking a bankruptcy judge to appoint an examiner to investigate factors leading to FairPoint's Chapter 11 bankruptcy last month.

A creditor committee claimed on Oct. 30 that FairPoint misrepresented its recovery prospects and that top managers sought to profit from the bankruptcy reorganization. It also questioned FairPoint's $23 million dividend payouts and the hiring of a new CEO without telecommunications experience.

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On Tuesday, lawyers for the creditors withdrew the motion.

North Carolina-based FairPoint, which last year bought Verizon's land line and Internet assets in Maine, New Hampshire and Vermont, filed for bankruptcy on Oct. 26.