It is reported that Avaya who nets $1 billion per year, owes seven years profits to repay the leverage heaped on the otherwise healthy company in a $8.2 billion private equity buyout in 2007.
In a recent Network World article, John Sullivan, vice president and corporate treasurer at Avaya, wrote about the Chapter 11 filing:
"After looking at the multiple options of how to deal with our debt, we decided it was a critical next step in our transformation from a hardware company to a software and services company and the best path forward for our customers, partners and employees. [The company faced] two choices: refinance at ever-increasing interest rates, creating an unsustainable expense burden, or restructure our debt."
With the company's announcement began an outward flow of energy. For some, the news presented opportunity. For others, the news created uncertainty. The balance will be determined by, as Sullivan wrote, "a legal system that allows companies to restructure their balance sheets and continue to operate as healthy businesses, providing jobs, technology innovation and value to customers."
