Major internet company files for Chapter 11 bankruptcy

The technology sector has not been immune to bankruptcy, as several companies have either filed for Chapter 11 protection or are considering filing a petition.

Struggling semiconductor supplier Wolfspeed is the latest major technology company to consider filing for bankruptcy, sources familiar with the matter told the Wall Street Journal on May 20.

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The Durham, N.C., tech company is reportedly pursuing a prepackaged Chapter 11 plan in the coming weeks after out-of-court debt restructuring attempts failed.

In April, banking-as-a-service start-up, Solid, which at one time called itself the Amazon Web Services of fintech, filed for Chapter 11 protection in Delaware after failing to secure an additional round of funding.

Everstream files for bankruptcy seeking to sell its assets.

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Everstream files for bankruptcy protection

And now, struggling business internet provider Everstream Solutions LLC has filed for Chapter 11 bankruptcy protection, seeking a sale of its assets, facing a potential default on over $1 billion in prepetition credit agreements.

The Cleveland-based provider of connectivity services, communications solutions, and network security for businesses in 13 states in the Midwest and Northeast and Washington, D.C., listed $500 million to $1 billion in assets and $1 billion to $10 billion in liabilities, including $1.06 billion in funded secured debt, in its petition filed on May 28.

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Its largest unsecured creditors include Crown Castle, owed over $1.45 million in trade debt; Illuminating Co., owed over $1 million in trade debt; and Northern Lights Locating & Inspection Inc., owed over $881,000.

The debtor blamed significant capital expenditures to expand its fiber network, unanticipated operational losses, industry headwinds, and unsustainable debt obligations for causing its financial distress that required a Chapter 11 filing.

Everstream, which is 99% owned by non-debtor Midwest Fiber Intermediate US LP, hired restructuring advisers in April 2023, facing limited liquidity and a risk of default, according to a declaration by Chief Restructuring Officer Justin Schmaltz.

The debtor launched recapitalization transactions to amend its credit agreements in October 2023, secured equity contributions, and sought a sales process for assets in Illinois, Missouri, and Pennsylvania.

The sale process had not closed in April 2024 when it began a review of strategic alternatives, as its 2023 recapitalization cash had diminished, and it faced another risk of default, according to the declaration.

The company began seeking a sale of all of its assets in September 2024, while a sale of its Illinois and Missouri assets closed in May 2025.

Bluebird Network offers $285 million for Everstream

A subsidiary of Bluebird Network LLC submitted a stalking-horse bid for debtor Midwest Fiber Holdings LP, which is listed as Everstream's ultimate owner, for $285 million on May 22.

The debtor closed and will wind down its Pennsylvania operations.

The debtor is also seeking approval of up to $186 million in debtor-in-possession financing, which includes $55 million in new money to fund its bankruptcy case.

The bankruptcy case timeline calls for an auction for the debtor's assets to be held on July 17, a sale hearing set for Aug. 1, a confirmation hearing for the case on Oct. 30 if the stalking-horse bid is successful, or on Nov. 14 if not, and an effective date for the confirmation of the bankruptcy plan by March 26, 2026.

Everstream was founded in 2014 and expanded through company growth and acquisitions from 2016-2022. The company generated over $135 million in revenue in 2022, over $148 million in 2023, and $156 million in 2024.

The debtor operates in Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia, West Virginia, Wisconsin, and the District of Columbia.