Avaya files for bankruptcy

 

N.C.-based cloud communications company Avaya has filed for Chapter 11 bankruptcy in federal court in Texas.  The company has reportedly secured $780M in financing and is restructuring its business, which is expected to take 60 to 90 days.  Avaya expects its “Restructuring Support Agreement” to reduce its total debt by more than 75%, from $3.4B to $800M.  The cloud communications company plans to continue to offer its services uninterrupted.  Avaya’s financial issues are largely attributed to accounting errors within the company’s cloud subscriptions, specifically misinterpretations regarding contract values and durations.  The company previously filed for bankruptcy in 2017, and its shares fell nearly 99% last year.