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Zona Communications Files Chapter 11 Petition; To Reorganize and Grow

Companies mentioned in this article: Zona Communications

PHOENIX -- (BUSINESS WIRE) -- Accipiter Communications, Inc., doing business as Zona Communications (“Zona”), a provider of telecommunications services to residences and businesses in central Arizona, announced today that it has filed a voluntary Chapter 11 bankruptcy petition in the US Bankruptcy Court for the District of Arizona in Phoenix. Zona intends to use the Chapter 11 process to restructure its long-term debt obligations and emerge from Chapter 11 as a stronger and more competitive company.

Zona’s cash flow is more than sufficient to provide Zona with the working capital necessary to continue business as usual during the Chapter 11 reorganization process, maintaining all its services to its customers and honoring all its ordinary course obligations to its vendors during the restructuring. Zona will continue paying all employee salaries and benefits and has asked the bankruptcy court to enter various orders typically entered at the early stages of reorganization cases to ensure uninterrupted business operations in all respects.

The Chapter 11 filing was necessitated after years of discussions between Zona and its secured lender, the Rural Utilities Service (“RUS,” an agency of the US Department of Agriculture). Despite multiple proposals from Zona, the RUS would not agree to extend new financing or restructure the company’s debt in a practicable way. This circumstance placed untenable strain on Zona’s cash flows and threatened the company’s ability to continue growing its subscriber base and thus reduce its dependence on federal revenue subsidies. The Chapter 11 filing will allow Zona to reshape its long-term debt structure and grow its customer base as a means of strengthening Zona’s cash flows and ensuring state-of-the-art telecommunications services to its customers.

“For years, Zona has been a success story in this segment of the telecommunications market. Our continued ability to prosper and grow is severely threatened unless we are able to restructure our long-term debt obligations to RUS,” said Patrick Sherrill, Zona’s CEO. “Although a Chapter 11 filing was not the company’s preferred method of restructuring, Zona ultimately believes that it is the most effective way to address Zona’s debt challenges and maximize Zona’s prospects for the future. I look forward to moving through the Chapter 11 process quickly in an active partnership with our loyal customers and our valued vendors, who I know will continue to be a huge part of our success.”

Zona has engaged Jordan A. Kroop of Perkins Coie LLP in Phoenix to act as the company’s bankruptcy counsel. All inquiries regarding the company’s Chapter 11 case should be directed to Jordan Kroop at (602) 351-8000 or

About Zona Communications

Zona Communications was formed in 1995 to provide telephone and broadband services to rural residences and businesses in central Arizona who previously had little or no access to any telecommunications services. Zona enjoys a strong reputation for its advanced fiber optic broadband network and outstanding customer service. Zona has built a strong competitive position in its service area and is poised to continue growing its customer base. For additional information, visit

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Zona Communications
Patrick Sherrill, (623) 455-4500