Avaya Bankruptcy Filing: 5 Things To Know
‘The actions we are taking are designed to accelerate our transformation and make Avaya an even stronger partner to our customers and strategic and channel partners,’ Avaya said in a channel and strategic partner FAQ on its bankruptcy filing.
After months of speculation and reports from the unified communications market, Avaya Holdings Corp. officially filed for Chapter 11 bankruptcy protection in Texas federal court Tuesday.
Durham, N.C.-based Avaya has been struggling since May to put its finances back on solid ground, but the bankruptcy declaration comes on the heels of accounting problems related to cloud subscriptions that led to substantial earnings and revenue target misses that the company couldn’t come back from without ultimately undergoing a financial restructuring.
Despite the financial upheaval, the company remains positive—and even bullish—on its future and is going all in on cloud communications in any form, be it private, public or hybrid unified communications offerings. And Avaya President and CEO Alan Masarek, who has been at the helm of the company for six months, is accustomed to navigating companywide transformations.
“The actions we are taking are designed to accelerate our transformation and make Avaya an even stronger partner to our customers and strategic and channel partners—we expect to emerge from this process with one of the strongest balance sheets in our industry, significantly reduced debt and substantial additional liquidity to drive the business forward,” Avaya said in a channel and strategic partner FAQ on the bankruptcy filing that CRN obtained.
Here are the details of Avaya’s bankruptcy filing, the financial background story and what the company’s financial restructuring means for partners.