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McLeodUSA CEO, CFO resign in anticipation of capital restructuring
By Caroline Salls
Pittsburgh, Aug. 15 - McLeodUSA Inc. chief executive officer and board chairman Chris Davis resigned as CEO in connection with the company's anticipated capital restructuring and change of ownership, according to a company news release.
Davis will remain with the company as chairman of the board of directors.
Also, Ken Burckhardt resigned from his positions as executive vice president, chief financial officer and company director.
The company has appointed Stan Springel of Alvarez & Marsal as chief restructuring officer. Joe Ceryanec, Alvarez & Marsal's group vice president, controller and treasurer, has been appointed as the acting chief financial officer.
As previously announced, the company is working with its lenders toward a capital restructuring where the lenders would convert a substantial portion of their debt to equity and become the company's stockholders.
None of the restructuring alternatives under evaluation provide for any recovery for the company's current preferred or common stockholders, according to the release. Therefore, the company said it does not expect holders of its preferred or common stock to receive any recovery in a capital restructuring.
The company's forbearance agreement, under which the lenders have agreed not to take any action as a result of non-payment of scheduled principal amortization and interest payments, expires Sept. 9.
According to the release, the company continues to believe that by not making principal and interest payments on the credit facilities, cash on hand and cash flows from operations are sufficient to maintain operations.
McLeodUSA is a Cedar Rapids, Iowa, telecommunications company.
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