TPx Wins Plan Confirmation to Restructure $1.1B in Debt

TPx Wins Plan Confirmation to Restructure $1.1B in Debt


Debtor(s)	U.S. TelePacific Corp. and 11 affiliated debtors
Court	U.S. Bankruptcy Court for the Southern District of Texas, Houston Division
Case Number	26-90625
Confirmation Date	September 2, 2026

Case Snapshot

Sources: Auction cancellation notice, September 2 confirmation order.

The sale process ended without a qualified bid

TPx pursued both a sale process and a negotiated reorganization. According to Chief Restructuring Officer Steven Shenker’s confirmation declaration, a marketing process launched in December 2025 produced nine bids before bankruptcy, but none was sufficiently developed to proceed. Marketing continued during the case without producing a qualifying postpetition bid. Shenker confirmation declaration

On August 10, the debtors cancelled the auction previously scheduled for August 12 and expressly stated that they would proceed with the reorganization transaction instead of a sale. The September confirmation order approved that reorganization path. Auction cancellation notice, confirmation order

The company serves approximately 11,000 customers, primarily across the United States. Its capabilities include unified communications and managed information technology services. Its customers span industries including healthcare, financial services, legal, retail, manufacturing, education, government, and nonprofit organizations. Amended disclosure statement

The projected capital structure combines debt and preferred equity

The amended disclosure statement presented the following approximate capitalization for the reorganized business. These figures are projections supporting the plan, rather than verified closing balances. Amended disclosure statement

Projected instrument	Approximate amount	Form
First-lien exit term loan	$54 million	Debt
Tranche A preferred interests	$65 million	Preferred equity
Tranche B preferred interests	$10 million	Preferred equity
Total of listed instruments	$129 million	Debt and preferred equity

Projected Reorganized Capital Structure

Source: Amended disclosure statement, page 43.

The displayed $129 million total combines borrowing and preferred equity. The disclosure statement describes the transaction as deleveraging the company’s balance sheet by approximately $1 billion. Amended disclosure statement

Creditor treatment varies by priority. Class 3 secured funded-debt holders receive their pro rata share of the defined reorganization consideration, with an option to elect cash instead. Second-lien secured holders receive their pro rata share of warrants. These plan provisions do not establish that the securities have been issued or cash has been distributed. Amended plan, Article III

The $73.55 million financing facility includes $20 million of new money

The August 3 final financing order authorized a facility with $73,549,998 of commitments. Its new-money component consists of two $10 million term-loan commitments. The remaining $53,549,998 consists of prepetition obligations exchanged into bankruptcy loans: $34,731,795 of superpriority obligations, $13,818,203 of first-lien interest obligations, and $5 million of first-lien principal. The exchanges are cashless roll-ups. Final financing order, pages 2–3

The order establishes financing authority and commitments. It does not, by itself, establish how much new money the debtors ultimately drew. The distinction between the facility’s total size and its new cash component matters when assessing the liquidity available during the case. Final financing order

Unsecured creditors receive a conditional cash pool

The amended plan incorporates a settlement among the debtors, the ad hoc lender group, and the official unsecured creditors’ committee. Allowed general unsecured claims share the defined Total GUC Consideration. Under the settlement, Pari Funded Debt Deficiency Claims, Second Lien Deficiency Claims, and Third Lien Deficiency Claims are waived as of the effective date and receive no distribution under the plan. Amended plan, Article IV.A

The pool has three components: $1 million of Fixed GUC Consideration, the plan-defined Savings Consideration, and First Day Consideration. First Day Consideration equals $15.5 million less the aggregate defined First Day Payments as of the effective date, with a floor of zero. Amended plan, definitions of Fixed GUC Consideration, First Day Consideration, and Total GUC Consideration

Total consideration is capped at $3 million and is subject to a further adjustment if allowed Class 6 claims total less than $27.8 million. In that circumstance, the plan specifies an amount equal to $3 million multiplied by allowed Class 6 claims divided by $27.8 million. Accordingly, the cap alone cannot establish either the final distribution pool or an individual creditor’s recovery percentage. Amended plan, definition of Total GUC Consideration

Confirmation leaves implementation to be verified

The reviewed evidence establishes entry of the September 2 confirmation order. The plan separately conditions effectiveness on matters including necessary regulatory approvals, completion of transaction documents, and funding of the professional fee account. The order permits consummation following satisfaction or permitted waiver of the applicable conditions. Amended plan, Article IX, confirmation order, paragraph 165

Kroll Restructuring Administration LLC is the noticing agent identified in the court materials. Its TPx case website provides reader access to case pleadings. Auction cancellation notice

A plan effective date and completed distributions have not been verified for this account. The confirmation order requires notice of confirmation and occurrence of the effective date within seven days after the effective date. That notice would help establish when the approved restructuring took effect. Confirmation order, paragraph 153