Mitel Networks Corporation, Interim Stay Order

Mitel Networks Corporation, an Ottawa-based telecommunications company that is part of the global Mitel Group, obtained an interim stay of proceedings under the CCAA after commencing Chapter 11 proceedings in Texas on March 10. Full recognition will be sought once the First Day Orders are granted in the Chapter 11 proceedings.

The Mitel Group was originally founded in Canada and has grown to become a global company with over 65 million end users in approximately 146 countries.

For the last several years, the company experienced a confluence of industry and other external headwinds that created unanticipated costs and adversely impacted operations and liquidity.

In 2022, the company entered into a transaction with certain secured creditors in an effort to generate additional liquidity. Despite the implementation of the 2022 transaction, the company has continued to face liquidity constraints, such that it now has approximately US$1.5 billion in liabilities. In addition, certain junior creditors who didn’t participate in the 2022 transaction later commenced litigation to challenge its validity.

To address these issues, the company has entered into a restructuring support agreement with an ad hoc group of lenders to be implemented through a Chapter 11 plan. The agreement contemplates the reduction of the company’s funded indebtedness by over $1.15 billion, the reduction of annual cash interest expense by approximately $135 million, and the settlement of the litigation regarding the 2022 transaction.

FTI is the proposed information officer.

Counsel is Goodmans for the company, Stikeman Elliott for the proposed information officer, and Bennett Jones for the ad hoc group of lenders.