Sorenson Communications files for bankruptcy
March 3, 2014
(Reuters) – Sorenson Communications Inc filed for Chapter 11 bankruptcy protection late on Sunday, a court filing showed, as declining revenue and mounting debt forced the company to consider restructuring.
Sorenson, which provides video relay services (VRS) for people with hearing loss, said in less than a year it would be obligated to pay about $1.28 billion.
Video relay service allows people with hearing difficulties to use video telephones and similar technologies to communicate via a sign language interpreter.
Due to regulatory changes, the debtors cannot pay or refinance the obligations based on its projected revenue and cash flow, the court filing showed.
The Federal Communications Commission’s (FCC) 2010 reduction in rates and increased minimum performance requirements for video conferencing services, made it infeasible to provide the service over the long term, the company said.
Sorenson and its affiliates generate revenue almost exclusively from FCC compensations for its services, making them especially susceptible to FCC-imposed rate changes, according to the filing.
The Salt Lake City, Utah-based company estimated assets of about $645 million and liabilities of about $1.4 billion, according to the filing.
Sorenson listed Allied Communications, Inc, CaptionCall LLC, SCI Holdings Inc, Sorenson Communications Holdings LLC, Sorenson Communications of Canada ULC and Sorenson Holdings Inc as affiliates.
As on January. 1, the company and its affiliates had about 6,800 employees, the filing said. The company says it is the largest employer of American Sign Language (ASL) interpreters in the United States.
The case is in re: Sorenson Communications, Inc, Case No. 14-10454, U.S. Bankruptcy Court, District of Delaware.
SOURCE:
http://www.reuters.com/article/2014/03/03/sorensoncommunications-bankruptcy-idUSL3N0M02BD20140303
SOURCE #2:
http://www.abladvisor.com/news/4147/sorenson-communications-files-chapter-11-seeks-quick-exit