Avaya Files for Chapter 11 Bankruptcy Protection

Avaya has filed for chapter 11 bankruptcy protection in U.S. court and is not considering the potential sale of its Contact Center business at this time, the company confirmed today. Avaya vowed to continue business operations while minimizing any potential disruptions.

According to an Avaya statement: “Avaya Inc. … today announced that it has commenced a formal proceeding to restructure its balance sheet to better position itself for the future.”


Amid the filing, Avaya has obtained a committed $725 million debtor-in-possession (“DIP”) financing facility underwritten by Citibank. Subject to Court approval, this DIP financing, combined with the Company’s cash from operations, is expected to provide sufficient liquidity during the chapter 11 cases to support its continuing business operations and minimize disruption, Avaya asserted.

Avaya Bankruptcy: Call Center, Pension Plan, Asset Sales

Rumors about Avaya potentially filing for bankruptcy protection have swirled since late 2016. Also of note:

  • Avaya Call Center Business: Rumors about Avaya potentially selling its call center business have circulated. But at this time Avaya is no longer negotiating to sell that business, the company said.
  • Potential Asset Sales: Avaya remains in ongoing negotiations to monetize certain other assets, as appropriate, to maximize value for all stakeholders, the company said. Rumors suggest the negotiations involve Avaya’s networking hardware business — rather than its core unified communications assets.
  • Avaya Pension Plans: Concerns about Avaya funding its pension plans had surfaced in December 2016. Without referring directly to those pension plans, an Avaya VP in December 2016 said the company’s debt was manageable and there’s no reason for panic.

Ironically, the company’s home page reads, “Strong Now. Stronger in the Future.”

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    Frank J Mezta:

    Caring for an 89-year old father, working part-time at a local school and helping out kids and grandkids means that without my Avaya pension, my family is in serious jeopardy. I retired after a 30+ year career, comfortable that my pension would be there for me and my family. The potential Chapter 11 news is horrible indeed.

      Joe Panettieri:

      Hey Frank: Thanks for your note. I’m sorry the topic is such a stressful one for your family. Just to be clear the Chapter 11 filing doesn’t necessarily end the pension program(s). But Avaya certainly is looking for ways to renegotiate with various parties. We’ll update our coverage if/when more details about the bankruptcy negotiations emerge.


    Charles Hendricks:

    I too retired after 33 yrs to take care of my disabled wife. I have a part time job also. It just wont cut it if the money goes away. Asking someone to start all over again at this stage is scary.

    Chuck Thiel:

    Come on every one, you know Avaya will cut every one if it serves the needs of the business. They could care less about anyone. Nothing has gotten any better when it comes to employees. You lost all your medical, dental, eyecare and on and on. Not like the Bell days.

    Richard Sofford:

    I retired also and a cut of my very modest pension will bankrupt me. I encourage everyone to call there congressman and senator from your respective states. These lawmakers receive life time pensions(large ones) after even a short term in office. When a company can split up and sell and come out on top after cheating their employees that built the company then our government should protect us. It is my perception only but it appears that way that Avaya has been intentionally under funding the pension just as they have been mismanaging the company. I talk to people that are still active out in the field not enough good service( because of cut backs) for our customers. Now that the prelude to bankruptcy has started who will buy a new Avaya phone system. Our union CWA is watching knowing what is about to happen and doing nothing. Call Your CWA reps also. I have paid the Union for my entire career. This same thing happened with airlines and it did not end well for retirees.

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