Starry might be down, but it’s not out. The company has filed for Chapter 11 bankruptcy protection and has every intention of coming out better on the other side.
CEO Chet Kanojia explained in a blog post that the company is doing what’s referred to as a “pre-arranged” restructuring, which generally means it’s working with lenders and other stakeholders to emerge healthier on the other side.
“Our case being "pre-arranged" means that we already have the plan and have vetted it with our lenders who have agreed to support it. This makes the process quicker and more efficient,” Kanojia stated.
Taking this route allows the company to continue operating uninterrupted, and it reassured customers on Tuesday that it’s not going out of business. “It is business as usual for Starry and our customers,” he said.
Starry came on the scene in 2014 and was founded by Kanojia, who also was behind Aereo, which tried to upend the online video business. Starry uses 802.11 technology and millimeter wave spectrum to disrupt the home broadband space, going up against cable companies and increasingly, wireless carriers. Starry charges $50 per month for internet service.
The company designed its own network hardware, including base stations, home receivers and Wi-Fi routers. It also created its own software billing, customer care and network management systems.
Quick downward spiral
It wasn’t quite a year ago when Starry went public in March 2022 through a special purpose acquisition company (SPAC) business combination and celebrated by ringing the opening bell at the New York Stock Exchange.
Since then, it’s been trying to raise money to fund its expansion in an increasingly brutal time. Finally, in the fall of last year, the company laid off about half its workforce, or 508 people.
It's been a steady stream of bad news ever since. Whereas Starry shares were $8.84 per share when it debuted on the NYSE, it was trading at $0.012 at the close on Tuesday. The company was notified in December that proceedings to delist the company’s stock had commenced.
On Tuesday, Starry announced it filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.
Included with various “first day” motions is a motion for approval of a $43 million debtor-in-possession financing facility that is expected to provide Starry with the necessary financing to get it through its normal business operations and meet obligations with employees, customers and vendors.
In the blog post, COO Alex Moulle-Berteaux said the company is focused, as always, on providing its customers and building partners with the best internet service experience possible. Starry will continue to serve existing and new customers in its five core markets, which include Boston, New York City, Los Angeles, Denver and Washington, D.C.