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Star News TV
RiverStreet Communications of Virginia and substantially all of its affiliates have initiated voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the Eastern District of Virginia and entered an asset purchase agreement with funds managed by Oaktree Capital Management, which would acquire substantially all of the company's assets for $92.5 million, subject to higher or better offers, court approval and regulatory review.
The filing followed a difficult stretch for the rural broadband provider in Virginia. The state's broadband office stripped RiverStreet of its contracts in July after the company left more than 30,000 rural customers without connections and no plan to finance its unfinished work. Under the West Broadband Project covering Henry, Patrick and Franklin counties, the company received an $87 million VATI grant with $65.4 million in match funding from RiverStreet and local governments, and was to deliver fiber to 14,547 potential customers, but it completed only 40 connections: 29 in Franklin County, 11 in Henry County and none in Patrick County.
RiverStreet said it will maintain its current networks and intends to finish new builds that are nearing completion, while transitioning certain unfinished expansion projects to other qualified providers. Bedford County-based ZiTel will work to complete the projects in Patrick, Henry, Franklin and Bedford counties. The company said it has received a commitment for approximately $20 million in new financing from CoBank to support operations during the Chapter 11 case, and that existing customers should not expect changes to their service or support.
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