Cloud computing provider Fusion Connect Inc. filed bankruptcy after a botched business plan and a pair of mergers piled on more debt than the company could repay, Bloomberg News reported. Unless a court-supervised auction brings in a better deal, senior lenders owed about $574 million will take over the company under a proposal to slash debt by $300 million, Chief Financial Officer Keith Soldan said in court papers filed in federal court in Manhattan yesterday. Fusion had borrowed $680 million, including the senior lender loans, to take over Birch Communications and MegaPath Cloud Co. last year. Part of that money went to pay off subordinated debt owed to company insiders Holcombe T. Green Jr. and Holcombe T. Green, III, according to court papers. The business plan behind the Birch acquisition was “overly aggressive in terms of sustained customer bookings and price increases,” Soldan said. “Missed revenue projections left the company with significantly less liquidity than originally anticipated.” Last month, the company lost its listing on the Nasdaq because it failed to file its annual stockholder report on time.
