Filing Alert: RiverStreet Chapter 11

RiverStreet Communications of Virginia, Inc., a Wilkesboro, NC-based provider of telecommunications and broadband services, filed for Chapter 11 protection o...

RiverStreet Communications of Virginia, Inc. and its debtor affiliates⁽¹⁾, a Wilkesboro, NC-based provider of telecommunications and broadband services, filed for Chapter 11 protection on Oct. 21 in the U.S. Bankruptcy Court for the Eastern District of Virginia.

The debtors filed with a signed stalking horse APA under which OCM Riverstreet Holdings, LLC, an entity formed by Oaktree Capital Management, agreed to acquire substantially all of their assets for $92.5 million plus the assumption of certain liabilities. The deal is subject to court approval and to higher or better offers in a Section 363 sale process. Alongside the sale, the debtors intend to work with federal, state, and local funding agencies to rationalize their grant and subsidy portfolio while keeping subscriber service running without interruption.

The company attributes its distress to the breakdown of a grant-funded fiber expansion. In 2023, it committed to an approximately $480 million buildout to approximately 182,000 locations across Virginia and North Carolina. An October 2023 senior secured refinancing led by CoBank, ACB was sized to front construction costs until grant reimbursements and recurring federal support came in. Beginning in 2024, higher materials and labor costs, rising interest rates, and the effective closure of capital markets to distressed rural telecommunications providers left an unfunded capital need of approximately $153 million. In August 2025, the company missed an interest payment and, at the same time, paused new construction; liquidity constraints then forced it to halt construction entirely in late 2025, breaching buildout milestones across its grant and subsidy portfolio. Awards began falling into default, and reimbursements and support payments were suspended or withheld. By mid-2026, the Commonwealth of Virginia had removed the company from $229.2 million of broadband commitments across twelve counties, and repayment demands followed, which the debtors dispute.

Under the prepetition CoBank facility, the debtors have approximately $35 million outstanding on the revolver (including letters of credit), $91 million on Term Loan A-1, and $93 million on the delayed draw term loan. The roughly $219 million total includes about $18 million of accrued interest and fees, and the obligations accrue default-rate interest paid in kind. As of the petition date, vendors and other creditors had made payment demands or filed suits seeking more than $35 million. To fund operations and the cases, the debtors are seeking a DIP facility from CoBank and consensual use of cash collateral. They turned to CoBank after a canvass of third-party lenders found no interest in providing a DIP that would rank junior to the existing secured debt.

The company reports $100 million to $500 million in both assets and liabilities. The filing indicates that there will be funds available for distribution to unsecured creditors. The case number is 26-72823.

⁽¹⁾ For a complete list of debtor entities, see the Chapter 11 Debtors table.

Chapter 11 Debtors

Affiliated Debtors Chart
Source: Bondoro, Court filings

Top Unsecured Claims

Form 204 Top Unsecured Claims
Source: Bondoro, Court filings

Key Parties

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