According to a Thursday report from Reuters, Avaya has filed for Chapter 11 bankruptcy in an effort to curtail its debt load of about $6.3 billion.
The telecommunications company also serves as the official stadium naming rights partner of the Earthquakes.
The bankruptcy announcement caught few off guard, and came after the company failed to reach a deal in the sale of its call centers with buyout firm Clayton, Dubilier & Rice, which had reportedly been in the lead to acquire it for $4 billion. Avaya faced an end of January deadline to address its debt or potentially default to its creditors.
From the Reuters report:
In order to simply maintain the current position the company is in, Avaya would be required “to constantly reinvest in new products and platforms,” Moody’s Investor Services said in August. In May, Avaya said it had contracted the services of Goldman Sachs and Centerview Partners to explore its options, including a sale or transaction to refill its capital structure.
Avaya's revenue fell to $958 million in the fourth quarter ended on Sept. 30 from $1 billion a year earlier, according to the report. For the fiscal year, the company posted a net loss of $750 million.
How, if it all, this will impact the Earthquakes’ agreement with Avaya as its stadium naming partner remains unknown, though Jared Shawlee, Chief Operating Officer of San Jose Earthquakes Soccer, said in a tweet that significant changes were not expected.
“Our partnership with @Avaya remains strong,” Shawlee tweeted, “and we look forward to many more years of our fans and community visiting @AvayaStadium.”