broadview first day decl

7/31/2019 Broadview First Day Decl

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UNITED STATES BANKRUPTCY COURTSOUTHERN DISTRICT OF NEW YORK------------------------------------------------------xIn re : Chapter 11

:

Broadview Networks Holdings, Inc., et al.,

1

: Case No. 12-__________ ( ):Debtors. : (Joint Administration Pending)

------------------------------------------------------ x

DECLARATION OF MICHAEL K. ROBINSON,

PRESIDENT AND CHIEF EXECUTIVE OFFICER

OF BROADVIEW NETWORKS HOLDINGS, INC., IN SUPPORT OF

CHAPTER 11 PETITIONS AND FIRST DAY PLEADINGS

I, Michael K. Robinson, declare, pursuant to 28 U.S.C. 1746, under penalty of

perjury that:

1. I am the President, Chief Executive Officer, and a Director of BroadviewNetworks Holdings, Inc. (BVNH), a corporation incorporated under the laws of Delaware. I

have served as an officer of BVNH and the other debtors and debtors in possession in the above-

captioned cases (collectively with BVNH, the Debtors or the Company) since March 2005,

and was appointed to the BVNH board of directors on January 9, 2009. In such capacities, I am

familiar with the day-to-day operations, business and financial affairs of the Debtors.

_______________________________

1 The last four digits of the taxpayer identification numbers of the Debtors follow in parentheses:(i) Broadview Networks Holdings, Inc. (0798); (ii) A.R.C. Networks, Inc. (0814); (iii) ARC Networks, Inc.(4934); (iv) ATX Communications, Inc. (2245); (v) ATX Licensing, Inc. (9838); (vi) ATXTelecommunications Services of Virginia, LLC (3888); (vii) BridgeCom Holdings, Inc. (2965);

(viii) BridgeCom International, Inc. (3985); (ix) BridgeCom Solutions Group, Inc. (3989); (x) BroadviewNetworks, Inc. (1082); (xi) Broadview Networks of Massachusetts, Inc. (8054); (xii) Broadview Networksof Virginia, Inc. (6404); (xiii) Broadview NP Acquisition Corp. (2734); (xiv) BV-BC AcquisitionCorporation (7846); (xv) CoreComm-ATX, Inc. (0529); (xvi) CoreComm Communications, LLC (2077);(xvii) Digicom, Inc. (0777); (xviii) Eureka Broadband Corporation (6004); (xix) Eureka Holdings, LLC(1318); (xx) Eureka Networks, LLC (1244); (xxi) Eureka Telecom, Inc. (3720); (xxii) Eureka Telecom ofVA, Inc. (5508); (xxiii) InfoHighway Communications Corporation (0551); (xxiv) Info-HighwayInternational, Inc. (8543); (xxv) InfoHighway of Virginia, Inc. (1600); (xxvi) nex-i.com, inc. (7035);(xxvii) Open Support Systems LLC (9972); and (xxviii) TruCom Corporation (0714). The Debtorsexecutive headquarters address is 800 Westchester Avenue, Rye Brook, NY 10573.

12-13581 Doc 3 Filed 08/22/12 Entered 08/22/12 17:22:06 Main Document Pg1 of 53

8824200120822000000000007

Docket #0003 Date Filed: 8/22/20


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2. On the date hereof (the Petition Date), each of the Debtors filed avoluntary petition for relief under chapter 11 of title 11 of the United States Code (the

Bankruptcy Code). The Debtors intend to continue in the possession of their respective

properties and the management of their respective businesses as debtors in possession.

3. Prior to the Petition Date, the Debtors solicited votes on theJointPrepackaged Plan of Reorganization for Broadview Networks Holdings, Inc. And Its Affiliated

Debtors (including all exhibits, schedules, appendices, and supplements thereto, and as amended,

modified, or supplemented from time to time, the Prepackaged Plan), through their disclosure

statement related to the Prepackaged Plan (the Disclosure Statement). On or around the date

that solicitation commenced, holders of over two-thirds of the aggregate principal amount of the

Debtors 11 3/8% senior secured notes due 2012 (the Required Consenting Noteholders) and

holders of approximately 70% of the preferred equity interests in BVNH (the Consenting

Equity Holders) entered into a restructuring support agreement, dated July 13, 2012 (as

amended, the Restructuring Support Agreement) whereby such parties agreed to support the

Prepackaged Plan. I understand that, after consideration of all votes that were submitted, the

Prepackaged Plan was accepted by 80% in dollar amount and 95% in number with respect to all

classes entitled to vote. As of the voting deadline (and excluding all late ballots) the Debtors

received acceptances from holders of 75% in amount and 95% in number of such holders

submitting a ballot. In addition, holders of 99.99% of the Existing Preferred Interests who voted

on the Prepackaged Plan voted in favor of the Prepackaged Plan. Only one significant holder of

Senior Secured Notes submitted a ballot to reject the Prepackaged Plan. The Debtors have filed

concurrently herewith a motion seeking, among other things, to schedule a combined hearing on

the confirmation of the Prepackaged Plan and approval of the Disclosure Statement.



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4. In order to enable the Debtors to operate effectively postpetition and toavoid the adverse effects of the chapter 11 filings, the Debtors have requested various types of

relief in first day applications and motions (the First Day Motions) filed with the Court,

including a motion seeking to have the Debtors chapter 11 cases consolidated for procedural

purposes and jointly administered (the Joint Administration Motion).

5. I submit this declaration pursuant to Rule 1007 of the Federal Rules ofBankruptcy Procedure and Rule 1007-2 of the Local Bankruptcy Rules for the Southern District

of New York (the Local Rules): (a) in support of the relief requested in the First Day

Motions; (b) to explain to the Court and other interested parties the circumstances that compelled

the Debtors to seek relief under the Bankruptcy Code; and (c) to provide certain information that

I understand is required by Local Rule 1007-2. Except as otherwise indicated, all facts set forth

in this declaration are based upon my personal knowledge and the knowledge I have acquired

from those who report to me, consultation with other officers of the Debtors, my review of

relevant documents, or my opinion based upon experience, knowledge and information

concerning the Debtors operations and financial condition. If called upon to testify, I could and

would testify competently to the facts set forth herein. I am duly authorized to submit this

declaration.

6. Part I of this declaration provides background with respect to the Debtorsbusiness, capital structure and reorganization efforts. Part II sets forth the relevant facts in

support of the Debtors First Day Motions. Part III provides the information that I understand is

required by Local Rule 1007-2.



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I. BACKGROUNDA. General.

7. The Company is a regulated provider of communications and informationtechnology solutions to business customers nationwide. Historically, the Company has focused

on markets across ten states throughout the Northeast and Mid-Atlantic United States, including

the major metropolitan markets of New York, Boston, Philadelphia, Baltimore and Washington,

D.C. For the three months ended March 31, 2012, approximately 88% of the Companys total

revenue was generated from over 34,000 retail end users in a wide array of industries, including

professional services, health care, education, manufacturing, real estate, retail, automotive, non-

profit groups and others. For the same period, approximately 12% of total revenue was

generated from wholesale customers, carrier access fees and other market channels.

8. The Company offers a comprehensive product portfolio based onproviding bundled packages that include both network connectivity and telecomm and IT

applications, with a focus on addressing the needs of end users operating within complex

telecommunications infrastructures. The Company benefits from both a strong traditional

network infrastructure and software development expertise and proprietary technology. This

allows the Company to offer its customers more than just network access, but additionally a

product line that includes advanced, converged communications services, including cloud-based

services (as described below), on a cost-effective basis. The Company offers a full suite of

voice, data, internet and cloud-based systems and services to customers located within the

Companys traditional network infrastructure, which is deployed throughout the Northeast and

Mid-Atlantic regional markets. In addition, the Company offers cloud-based systems and

services to customers nationwide. That segment represents the greatest growth potential for the

Company.



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9. To provide comprehensive network connectivity to its nationwidecustomers, the Company utilizes its own network of telecommunications switches, data routers,

application servers and related equipment located in its switching locations and data centers, and

connects to other third parties networks. The Company purchases this connectivity from other

carriers for resale to its customers through various resale arrangements and various other

commercial agreements.

B. Industry Overview.10. The market for communications services, particularly local voice, has

been historically dominated by the incumbent local exchange carriers (ILECs) in the United

States, including Verizon Communications Inc. (Verizon), AT&T Inc. (AT&T),

CenturyLink Inc., Frontier Communications Corporation, FairPoint Communications, Inc.

(FairPoint) and Windstream Corporation. While the ILECs own substantially all of the local

exchange networks providing basic network access in their respective operating regions,

competitive communications providers, such as the Company, hold significant market share. In

recent years, the number of competitive communications providers in the United States has been

reduced due to industry consolidation and the fact that leading cable companies have entered the

residential and business communications markets, thereby reducing the market share held by

ILECs.

11. Increased complexity in delivering communications and IT services,together with what has been a challenging economic climate has driven business customers to

evaluate alternative approaches, including cloud-based applications and services. As competitive

pressures have commoditized more access services, cloud-based services represent growth

opportunities for competitive providers who are successful in tailoring cloud-based applications

to individual business needs.



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C. Products and Services.12. The Companys array of communications and IT services include cloud-

based services, voice and data communications services and value-added products and services.

The Companys products and services are offered with a range of alternatives and customized

packages, allowing the Company to meet the specific requirements and objectives of a large

number of potential business customers. The Companys sales and marketing initiatives focus

on bundling products and services into a single, tailored and competitively priced package for

each customer.

(1) Cloud Services.13. Cloud computing is the delivery of voice and data communications,

computing and storage capacity to end users from a remote location. More than just

connectivity, cloud-based services allow the actual storage space and software applications to be

stored off-site, or in the cloud, and accessed through a network connection.

14. OfficeSuite is the Companys cloud-based voice-over-IP (VoIP)communications solution, and is one of the Companys fastest-growing product lines. VoIP

technology allows for the delivery of voice communications and multimedia sessions over

networks such as the Internet. OfficeSuite packages business-grade VoIP with advanced

telephone equipment and managed network security into a unified communications package.

OfficeSuite features include unlimited local and long distance calls, online updates, secure

multi-site data networking and high-speed internet access. Customers can choose from a range

of different connectivity options at various price points as a customers access to cloud services

is not dependent on such customer being located within the Companys traditional network

infrastructure. In 2009, the Debtors acquired the source code and intellectual property

underlying the OfficeSuite software.



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15. In 2011, the Company introduced OfficeSuite ACD, a full-featuredcloud-based application integrated with OfficeSuite

that provides robust call center capabilities

for business customers, including advanced call routing, queuing, call recording, easy-to-use

reporting and functionality. OfficeSuite ACD delivers to business customers the advanced call

center features of other internal telephone connection systems without the need to invest capital

in on-site equipment or intensive IT support. It provides a suite of highly flexible capabilities

that enable quick and easy prioritization and distribution of incoming business calls, customized

hold treatments and advanced call routing options that factor in a number of customer-specified

parameters.

16. Along with network connectivity, the Companys cloud-based computingpackages also include bundled packages of subscription-based software and infrastructure

services. Thus, by connecting to the cloud, customers are additionally able to remotely access

business applications, including Microsoft Office and Microsoft Exchange. By providing these

cloud-based software and infrastructure services to its customers, the Company is able to provide

greater customer value as compared to solely providing network access, thereby increasing its

share of the customers overall communications and IT operational expenditures and at the same

time increasing the Companys monthly recurring revenue per customer.

(2) Other Value-Added Products and Services.17. The Company gives its customers the option to outsource necessary

management and maintenance services. Packaged solutions of day-to-day management and

ongoing maintenance include managed e-mail security, content filtering and online data backup

and recovery.



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(3) T-1 Based & Traditional Offerings.18. The Company also offers integrated voice and data packages. These

integrated offerings result in performance and cost efficiencies compared to purchasing discrete

services from separate competing carriers.

19. The Company provides customized voice packages that include featuressuch as call forwarding, call waiting, call transfer, calling number identification/calling name

identification, voicemail and direct inward dialing. The Company uses its own network elements

and those procured pursuant to contracts with Verizon, AT&T, FairPoint and other carriers, to

service its customers. In addition to the local service portfolio, the Company offers a range of

dedicated long-distance services.

20. The Company also offers ancillary long-distance services such as operatorassistance, calling cards and conference calling. In instances where a customer may have

locations outside the Companys network footprint, the Company resells the long-distance

services of other communications carriers through agreements with those carriers. The Company

generally sells or offers its long-distance services as part of a bundle that includes one or more

other service offerings. In addition, through arrangements with national IP network providers,

the Company offers certain services on a nationwide basis to business customers who have

locations outside of the Companys network footprint.

D. Service Agreements with Carriers.21. In order to provide certain services to its customers, the Company

purchases facilities and services from ILECs. Pursuant to Federal Communication Commission

(FCC) rules, the Company maintains certain interconnection agreements with ILECs through

which it secures access to the unbound network elements it uses to serve its customers. The

Company has interconnection agreements in effect with Verizon, FairPoint and AT&T, and is



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currently negotiating agreements with other ILECs to support its nationwide service offering.

The Company also maintains agreements with other, non-ILEC carriers for the provision of

network facilities, including fiber routes and high capacity loops and transport, internet service

providers, and local voice and data services. Through agreements with a number of different

long distance carriers the Company obtains toll services for resale to its customers. Additionally,

the Company maintains agreements with various entities for ancillary services such as out-of-

band signaling, directory assistance and 9-1-1.

E. Real Estate Facilities.22. The Debtors are headquartered in Rye Brook, New York. The Debtors do

not own any of their facilities, but lease fifteen material facilities in New York, Pennsylvania,

New Jersey, Washington D.C./Northern Virginia and Massachusetts consisting of seven offices

and eight switch locations. In addition, FCC rules generally require ILECs to permit

competitors, such as the Company, to colocate equipment used for interconnection and/or access

to the ILECs unbundled network elements. The Debtors maintain approximately 260 of these

colocations with Verizon and FairPoint within the Northeast and Mid-Atlantic regions.

F. Employees and Channel Partners.23. As of the Petition Date, the Debtors employed approximately 850

employees, and contracted with hundreds of agent channel partners who market and sell the

Companys products.

G. Regulation.24. The Company is subject to federal, state, local and foreign laws,

regulations, and orders affecting the rates, terms, and conditions of certain of its service

offerings, operations and relations with other service providers. The FCC has jurisdiction over



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the Companys facilities and services to the extent they are used in the provision of interstate or

international communications services.

25. State regulatory public utility commissions generally have jurisdictionover the Companys facilities and services to the extent they are used in the provision of

intrastate services. In addition, local governments may regulate aspects of the Companys

business through zoning requirements, permit or right-of-way procedures, and franchise fees.

Foreign laws and regulations apply to communications that originate or terminate in a foreign

country.

H.

Debtors Prepetition Capital Structure.

26. As of the Petition Date, the Debtors had approximately $335 million ofoutstanding liabilities under the ABL Facility, Senior Secured Notes (each as defined below) and

various capital leases. The Debtors prepetition capital structure is described in more detail

below.

(1) ABL Facility.27. Certain of the Debtors are borrowers under a $25 million five-year

revolving credit facility (the ABL Facility) governed by that certain Credit Agreement, dated

as of August 23, 2006 and amended as of July 27, 2007, November 23, 2010, December 8, 2011,

May 31, 2012 and July 19, 2012 (as further amended and modified, and together with any

ancillary documents, the Credit Agreement), by and among the borrowers, and The CIT

Group/Business Credit, Inc. (CIT), as administrative agent and lender.

28. Indebtedness under the ABL Facility is guaranteed by substantially all ofBVNHs direct and indirect subsidiaries that are not borrowers thereunder and is secured by a

first priority security interest in accounts, inventory, deposit accounts, cash, securities accounts,

investment property, lock boxes, capital stock and general intangibles, among other assets, and a



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second priority security interest in substantially all of the remainder of the Debtors assets. As of

the Petition Date, BVNH has approximately $13.9 million of outstanding borrowings under the

ABL Facility. On July 19, 2012, the ABL Facility was amended to extend the term through

September 5, 2012.

(2) Senior Secured Notes.29. On August 23, 2006, BVNH completed an offering of $210 million

aggregate principal amount of senior secured notes due 2012 (the 2006 Notes), and on May

14, 2007, BVNH completed an additional offering of $90 million aggregate principal amount of

senior secured notes due 2012 (together with the 2006 Notes, the Original Notes) issued

pursuant to that certain Indenture for 11 3/8% Senior Secured Notes due 2012, dated as of

August 23, 2006, and supplemented as of September 29, 2006, May 14, 2007 and May 31, 2007

among Broadview Networks Holdings, Inc., as Issuer, certain other Debtors, as Guarantors, and

The Bank of New York, as Trustee and Collateral Agent.

30. On November 14, 2007, BVNH exchanged $300 million of the OriginalNotes, representing 100% of the outstanding aggregate principal amount, for an equal principal

amount of a new issue of substantially identical debt securities that were registered under the

Securities Act of 1933, as amended (the Senior Secured Notes). Prior to the Petition Date

BVNH paid cash interest on the principal amount of the Senior Secured Notes at a rate of

11.375% per annum, which is due semi-annually on March 1 and September 1 of each year. The

Senior Secured Notes mature on September 1, 2012. Since the registration of the Senior Secured

Notes, the Debtors have filed periodic reports with the Securities Exchange Commission.

31. The obligations under the Senior Secured Notes are guaranteed on a seniorsecured basis, jointly and severally, by substantially all of BVNHs existing and future domestic

restricted subsidiaries. The Senior Secured Notes are secured by a lien on substantially all of the



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Debtors assets; provided, however, that pursuant to the terms of that certain Intercreditor

Agreement, dated as of August 23, 2006 and amended as of May 10, 2007, the security interest

in the Companys receivables, inventory, deposit accounts, securities accounts and certain other

assets that secure the Senior Secured Notes are contractually subordinated to the lien that secures

the ABL Facility.

(3) Capital Stock.32. BVNHs outstanding capital stock consists of authorized common stock

and preferred stock. There is no established public trading market for BVNHs outstanding

capital stock. As of March 31, 2012, there were: 87,254 outstanding shares of BVNHs Series A

Preferred Stock; 100,702 outstanding shares of BVNHs Series A-1 Preferred Stock; 91,187

outstanding shares of BVNHs Series B Preferred Stock; 62,756 outstanding shares of BVNHs

Series B-1 Preferred Stock; and 14,402 outstanding shares of BVNHs Series C Preferred Stock

(collectively, the Existing Preferred Interests). BVNH also has 9,286,759 outstanding

shares of Class A Common Stock and 360,050 shares of Class B Common Stock.

I. Events Leading to Chapter 11 Cases.33. During the last 18 months the Company and its management team

diligently explored potential transactions including mergers and acquisitions, refinancing and

restructuring in an effort to have sufficient capital leading up to September 1, 2012, the maturity

date for the Companys $300 million in Senior Secured Notes. In October 2010, the Company

retained Jefferies & Company, Inc. as its investment banker to evaluate strategic options, and in

December 2011, the Company retained Evercore Group, L.L.C. (Evercore) as its financial

advisor to assist the Company with respect to a refinancing or restructuring transaction.

34. As part of their engagements, the Debtors financial advisors worked withthe Board of Directors of BVNH and the Companys management to pursue strategic



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alternatives, including mergers or acquisitions, an investment in the Company, a sale of all or

substantially all of the assets of the Company, or a sale of certain operations or discrete assets of

the Company. In connection with such efforts, certain parties expressed preliminary interest in

various transactions with respect to the Debtors assets. For a variety of reasons, such

transactions did not develop. The Company also explored other strategic options, such as a

refinancing, including through a notes offering launched in June 2011 which due to, among other

things, the effects of global economic conditions on the debt market, could not be consummated.

35. During this time, the Company also sought to negotiate with its largestbondholders, and, in the second quarter of 2012, certain of the Debtors largest bondholders

retained legal and financial restructuring advisors to work with the Company to pursue a

potential balance sheet restructuring, while the Company was simultaneously continuing to

explore other opportunities. Due to macro-economic trends and trends specific to the

Companys industry, the Company was unable to obtain new financing or to achieve a sale

transaction with sufficient value to pay the Senior Secured Notes in full prior to maturity.

36. It became clear that a consensual balance sheet restructuring with holdersof the Senior Secured Notes was the Companys best option to maximize value for the

Companys stakeholders. Upon the execution of customary confidentiality agreements, the

Debtors provided certain bondholders with information regarding the Debtors operations,

projections and business plan to facilitate their ability to negotiate and assess a potential

restructuring plan with the Company. After good-faith, arms-length negotiations, the Debtors

reached an agreement with the Required Consenting Noteholders and the Consenting Equity

Holders, which agreement was memorialized by the Restructuring Support Agreement. Pursuant

to the terms of the Restructuring Support Agreement, the Required Consenting Noteholders and



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Consenting Equity Holders agreed to support a balance sheet restructuring pursuant to a

prepackaged chapter 11 plan in accordance with the terms of a term sheet attached to the

Restructuring Support Agreement.

37. Solicitation for votes to accept or reject the Prepackaged Plan waslaunched prior to the Petition Date on July 13, 2012. After a 30-day solicitation period, the

Debtors received votes in favor of the Prepackaged Plan from 80% of the holders of the Senior

Secured Notes and holders of 99.99% of the Existing Preferred Interests that voted. The

Company filed these cases on the Petition Date in order to consummate the Prepackaged Plan,

which was filed contemporaneously herewith. The Company has contemporaneously filed a

motion requesting a hearing date for the confirmation of the Prepackaged Plan, and the approval

of the Debtors disclosure statement and prepetition solicitation procedures. If consummated, the

restructuring transactions contemplated in the Prepackaged Plan will substantially de-lever the

Debtors and provide cost savings and additional needed liquidity for the Company.

J. The Prepackaged Plan.38. In accordance with the terms of the Restructuring Support Agreement,

prior to the Petition Date, the Debtors solicited votes on the Prepackaged Plan through the

Disclosure Statement. If consummated, the restructuring transactions contemplated in the

Prepackaged Plan will substantially de-lever the Debtors and provide cost savings and additional

needed liquidity for the Debtors by, among other things, reducing the amount of the Debtors

outstanding debt by half.

39. Generally, the Prepackaged Plan provides that:(a) holders of the Senior Secured Notes shall receive their pro rata

share of (i) 97.5% of the common stock (the New CommonStock) of reorganized BVNH subject to dilution by shares of NewCommon Stock issued pursuant to the management equity plan or



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upon exercise of the New Warrants (as defined below), and(ii) $150 million of new 10.5% senior secured notes due 2017;

(b) a new exit facility that will provide total borrowing availabilityupon consummation of the Prepackaged Plan of no less than$25 million;

(c) the repayment in full and termination of the Debtors obligationsunder the Existing ABL Facility if not previously repaid pursuantto the DIP Credit Facility;

(d) the issuance of (i) 2.5% of the New Common Stock, subject todilution by shares of New Common Stock issued pursuant to themanagement equity plan or upon exercise of the New Warrants,and (ii) two series of 8-year warrants to purchase up to (A) 11% ofthe New Common Stock, and (B) 4% of the New Common Stock(collectively, the New Warrants), in each case, subject to

dilution by the management equity plan to be issued on a pro ratabasis to holders of the Debtors outstanding existing preferredequity interests in exchange for the cancellation of such interests;

(e) the cancellation of all of the existing equity interests in BVNH;and

(f) the retirement of the Senior Secured Notes.II. SUMMARY OF FIRST DAY MOTIONS2

40.

To enable the Debtors to operate effectively and to avoid the adverse

effects of the chapter 11 filings, the Debtors have filed, or will file upon scheduling of a further

hearing by this Court, the motions described below.

41. In connection with the preparation for these bankruptcy cases, I havereviewed each of the First Day Motions referenced below. The First Day Motions were prepared

with my input and assistance, or the input and assistance of employees working under my

supervision. I believe the information contained in the First Day Motions is accurate and correct.

As set forth more fully below, I believe that the entry of orders granting the relief requested in

_______________________________

2 Capitalized terms used but not defined in this section have the meanings given them in the relevant First

Day Motion.



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these motions and applications is critical to the Debtors ability to preserve the value of their

estates and assist in their reorganization efforts.

A. Motions Related to Case Management.(1) Joint Administration Motion.

42. The Debtors seek the joint administration of their chapter 11 cases, 28 intotal, for procedural purposes only. I believe that it would be far more practical and expedient

for the administration of these chapter 11 cases if the Court were to authorize their joint

administration. Many of the motions, hearings, and other matters involved in these chapter 11

cases will affect all of the Debtors. Hence, joint administration will reduce costs and facilitate

the administrative process by avoiding the need for duplicative hearings, notices, applications,

and orders.

(2) Case Management Motion and Form and Manner of Notice.43. To ease the administrative burden of these cases on the Debtors estates,

the Debtors request relief regarding creditor lists and the form and manner of the notices in these

cases. The Debtors request entry of an order establishing omnibus hearing dates and certain

notice, case management, and administrative procedures. The Debtors further request entry of an

order: (a) waiving the requirement for filing a list of creditors; (b) authorizing the Debtors to file

a consolidated list of creditors; and (c) waiving the initial case conference if the Prepackaged

Plan is confirmed on or before sixty (60) calendar days after the Petition Date. I believe that the

relief requested will reduce the administrative costs of these cases and is in the best interests of

these estates.



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(3) Motion to Grant an Extension of Time to File Schedules and Statement ofFinancial Affairs and Waiving Same Upon Confirmation.

44. Prior to filing this case, the Debtors were unable to devote the resourcesnecessary to complete the Schedules due to the substantial time spent preparing for the chapter

11 filing and attending to operations. Furthermore, the Debtors have a significant number of

creditors and executory contracts and, thus, will require additional time to review their books and

records to accurately reflect their obligations and financial position in the Schedules.

Accordingly, the Debtors respectfully request additional time to finalize their Schedules.

45. Moreover, under the circumstances of these chapter 11 cases, I believethat the purposes of filing the Schedules and Statements generally have been fulfilled by other

means and that the completion of the Schedules and Statements cannot be justified given the

costs to the Debtors estates. To require the Debtors to file the Schedules and Statements would

be unnecessarily burdensome to the Debtors estates. Accordingly, I believe it is in the best

interests of the Debtors and their estates for this Court to waive the requirement that the Debtors

file their Schedules and Statements upon confirmation of the Prepackaged Plan.

(4) Motion to Approve Solicitation Procedures and ScheduleCombined Hearing on Disclosure Statement and Confirmation of

Prepackaged Plan.

46. In connection with the Prepackaged Plan, the Debtors prepared theDisclosure Statement describing, among other things, the proposed reorganization and its effects

on holders of claims against and interests in the Debtors. On or about July 13, 2012, the Debtors

caused a copy of the Disclosure Statement, the Prepackaged Plan and the appropriate ballots to

be delivered to each known holder of Senior Secured Notes Claims and Existing Preferred

Interests that was entitled to vote on the Prepackaged Plan. The Debtors established August 13,

2012 as the deadline for the receipt of votes to accept or reject the Prepackaged Plan (the



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Voting Deadline). As described above, the solicitation of votes on the Prepackaged Plan was

an overwhelming success. The Debtors have filed an affidavit of their voting agent certifying the

results of the solicitation of votes on the Prepackaged Plan.

47. The Disclosure Statement is extensive and comprehensive. It containsdescriptions and summaries of, among other things: (a) the Prepackaged Plan; (b) certain events

preceding the commencement of these chapter 11 cases; (c) claims asserted against the Debtors

estates; (d) securities to be issued under the Prepackaged Plan; (e) risk factors affecting the

Prepackaged Plan; (f) a liquidation analysis setting forth the estimated return that creditors would

receive in a hypothetical chapter 7 case; (g) financial information and valuations that would be

relevant to creditors determinations of whether to accept or reject the Prepackaged Plan; and (h)

securities law and federal tax law consequences of the Prepackaged Plan.

48. Based on my understanding of the solicitation and notice processconducted by the Debtors on a prepetition basis, I believe that the Debtors conducted a proper

solicitation of votes on the Prepackaged Plan and that no further notice is required.

B. Applications and Motions Related to the Retention of Professionals.(1) Application to Employ and Retain Willkie Farr & Gallagher LLP.

49. Concurrently herewith, the Debtors have filed an application to retainWillkie Farr & Gallagher LLP (WF&G) as counsel with regard to the filing and

administration of these chapter 11 cases. Prior to the Petition Date, WF&G was retained by the

Debtors as general corporate counsel, and more recently, has provided advice and assistance with

regard to financial restructuring, including the solicitation of the Prepackaged Plan and the

Disclosure Statement, as well as the preparation and commencement of these cases. The Debtors

desire to continue to employ WF&G to provide restructuring advice and services as is necessary



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and requested by the Debtors, including, without limitation, bankruptcy, debt restructuring,

corporate, litigation and tax services.

50. I understand that WF&Gs attorneys have extensive experience andknowledge in the fields of debtors and creditors rights, debt restructuring and corporate

reorganizations, tax, employee benefits and commercial litigation, among others. In addition,

WF&G has become familiar with the Debtors operations and businesses as a result of the

services it provided to the Debtors prior to the commencement of these cases. Accordingly, I

believe that WF&G is well qualified to represent the Debtors in these chapter 11 cases.

(2)

Application to Employ and Retain Evercore.

51. The Debtors have filed an application to employ and retain Evercore asinvestment banker and financial advisor to the Debtors. On or about December 19, 2011, and

after a diligent process by which the Debtors assessed competing advisors, the Debtors retained

Evercore to provide advice in connection with the Debtors attempts to complete a strategic

restructuring, reorganization, and/or recapitalization and to explore potential sales of assets. I

understand that Evercore has extensive experience in the fields of restructuring and providing

financial and operational guidance to companies in distressed situations and has provided

financial advisory services to debtors and creditors in other chapter 11 cases. I believe that

Evercore is well qualified to serve as investment banker and financial advisor to the Debtors by

virtue of this experience and its knowledge of the Debtors, their operations and their capital

structure that Evercore acquired through its prepetition representation of the Debtors.

Accordingly, I submit that the retention of Evercore as investment banker and financial advisor

is in the best interests of the Debtors estates, creditors and other parties-in-interest, and should

be granted.



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(3) Application to Employ and Retain Kurtzman Carson Consultants.52. The Debtors filed applications to retain Kurtzman Carson Consultants

LLC (KCC) as this Courts notice and claims agent, and administrative agent, for the Debtors

chapter 11 cases. I believe that the retention of KCC is critical because of the large number of

creditors identified in these cases.

53. I understand that KCC is a data processing firm with extensive experiencein noticing, claims processing, balloting and other administrative tasks in chapter 11 cases. In

accordance with the Protocol for the Employment of Claims Agents, dated November 15, 2011,

issued by the Clerk, the Debtors solicited bids from three prominent bankruptcy claims and

noticing agents prior to selecting KCC and believe KCCs rates are reasonable given the quality

of KCCs services and KCCs prior bankruptcy expertise. Given the need for the services

described above and KCCs expertise in providing such services, I believe that retaining KCC

will expedite service of notices, streamline the claims administration and balloting processes, and

permit the debtors to focus on their reorganization efforts.

C. Motions Related to Financing of Operations.(1) Motion to Authorize Continued Use of the Debtors

Cash Management System, Bank Accounts and Business Forms.

54. In the ordinary course of their businesses prior to the Petition Date, and asis typical with business organizations of similar size and scope, the Debtors maintained a

centralized cash management system to collect, transfer, and disburse funds generated through

their operations efficiently and to record such transactions accurately (the Cash Management

System).

55. It is my understanding that the U.S. Trustee has established certainguidelines which require chapter 11 debtors to, among other things, close all existing bank



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accounts and obtain, establish and maintain separate debtor-in-possession accounts, and utilize

new checks for all debtor-in-possession accounts, which bear the designation Debtor in

Possession and contain certain other information related to the chapter 11 case. The Debtors

request a waiver of the requirement that the Debtors open new bank accounts.

56. I believe that the Debtors existing cash management and intercompanyaccounting procedures are essential to the orderly operation of the Debtors businesses. A new

Cash Management System could cause confusion, disrupt payroll, introduce inefficiency when

efficiency is most essential, and strain the Debtors relationships with critical third parties, each

of which could diminish the prospects for a successful reorganization. Thus, the Debtors seek

authorization to continue the management of their cash receipts and disbursements in the manner

in which they were handled immediately prior to the Petition Date.

57. In addition, I understand that section 345(b) of the Bankruptcy Codecontains certain deposit, investment and reporting requirements. The Debtors believe their

current Cash Management System meets those requirements.

58. The Debtors also respectfully request that the Court authorize the Debtorsto treat all intercompany claims arising after the Petition Date in the ordinary course of business

as superpriority administrative expenses, junior in all respects to the superpriority claims of the

Debtors postpetition secured lenders and subject to the adequate protection liens granted to the

Debtors prepetition secured lenders. If the Court authorizes the Debtors to treat these

Intercompany Claims as administrative expenses, then each entity utilizing funds flowing

through the Cash Management System will continue to bear ultimate repayment responsibility

for such entitys individual obligations.



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59. I believe that allowing the Debtors to maintain their Cash ManagementSystem would be in the best interests of the Debtors estates, creditors and other parties in

interest.

(2) Motion to Approve Debtor-in-Possession Financing.60. The Debtors seek authority to enter into a debtor-in-possession financing

facility, grant senior liens, junior liens and superpriority administrative expense status, use cash

collateral, provide adequate protection to prepetition lenders and schedule a final hearing with

respect to the relief requested, all as more fully described in the motion.

61. Upon the execution of customary confidentiality agreements, the Debtorsprovided CIT with information regarding the Debtors operations, projections and business plan

to facilitate their ability to negotiate a potential debtor-in-possession credit facility for the

Company. The Debtors intend to enter into a senior secured, superpriority debtor-in-possession

revolving credit agreement (the DIP Facility) in the amount of up to $25 million, structured as

a revolving credit facility that will be provided by The CIT Group/Business Credit, Inc. While

the Company currently projects that it will have sufficient cash to fund its ongoing operations

during the course of these cases, the Company, in its business judgment, believes that the DIP

Facility is needed in the event that the Debtors chapter 11 cases last longer than anticipated or

the Debtors financial results or cash flows are weaker than expected and to provide comfort to

third parties, such as the Companys vendors, regarding the adequacy of the Debtors liquidity.

62. The reasons supporting the Debtors request for authority to obtainpostpetition financing under the DIP Facility and to use cash claimed as collateral (Cash

Collateral) are compelling. As explained in greater detail in the relevant motion, the DIP

Facility will be used to provide liquidity for working capital and other general corporate

purposes of the Debtors, subject to the Budget (as defined in the DIP Facility). Cash held by the



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Debtors prior to the Petition Date, including some cash that is Cash Collateral, will provide the

Debtors with funds necessary for the operation of their business, including meeting their payroll

and vendor obligations. Without the immediate use of Cash Collateral, the Debtors may be

unable to fund their operations. I believe that access to Cash Collateral and the funds available

under the DIP Facility is crucial to the Debtors ability to maintain their businesses and to avoid

immediate and irreparable harm to their estates, employees, customers and creditors.

63. I understand that Evercore, the Debtors financial advisors, contacted six(6) third-party lenders who are active in the debtor-in-possession financing market and each

indicated that it would not be willing to extend postpetition financing to the Debtors on an

unsecured or junior basis. In addition, on August 6, 2012, the Debtors received a non-binding

proposal for potential debtor-in-possession financing. This proposal was accompanied by a term

sheet for an alternative plan and was not available to the Debtors as a stand-alone financing

alternative.

64. Ultimately, the Debtors determined, given their need for the DIP Facilityand discussions with other potential lending sources, that the financing provided under the DIP

Facility was the best financing available on comparable terms. Moreover, pursuant to the terms

of their Intercreditor Agreement the Senior Secured Noteholders have consented to the priming

of their liens granted under the DIP Facility.

D. Motions Related to Employee Matters.(1) Motion for Authorization to Pay Certain Prepetition Claims of Employees.

65. Concurrently herewith, the Debtors have filed a motion seeking authorityto, among other things, satisfy certain of their prepetition obligations to their current employees

(the Employees), reimburse Employees for prepetition expenses that were incurred on behalf

of the Debtors and pay prepetition payroll-related taxes associated with the Companys employee



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wage claims and the employee benefit obligations, and other similar tax obligations. This relief

is critical to the Debtors businesses and reorganization efforts.

66. In order to achieve a successful reorganization, it is essential that theEmployees work with the same or greater degree of commitment and diligence as they did prior

to the Petition Date. The requested authority to continue to pay the Employees prepetition

salaries and wages and to maintain the current employee benefits programs is critical to ensure

that: (a) the Debtors can retain personnel knowledgeable about the Debtors businesses; (b) the

Debtors Employees continue to provide quality services to the Debtors at a time when they are

needed most; and (c) the Debtors remain competitive with comparable employers.

67. If this motion were not granted, I believe that it would result in asignificant deterioration in morale among Employees, which undoubtedly would have a

devastating impact on the Debtors, their customers, the value of estate assets and the Debtors

ability to reorganize. The total amount to be paid if the relief sought in the motion is granted is

modest compared with the size of the Debtors estates and the importance of the Employees to

the restructuring effort. I believe authorizing the Debtors to pay these obligations in accordance

with the Debtors prepetition business practices is in the best interests of the Debtors, their

creditors, and all parties in interest, and will enable the Debtors to continue to operate their

businesses without disruption in an economic and efficient manner.

68. For the reasons set forth above, I believe that granting the requested reliefis in the best interests of the Debtors, their creditors, and all parties in interest.

(2) Motion for Authorization to Pay Certain Prepetition Claims of IndependentSales Agents.

69. In the ordinary course of their businesses, the Debtors utilize the servicesof approximately 300 sales agents, who are engaged as independent contractors (the



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Independent Sales Agents). Historically, 25-30% of the Debtors new business is generated

by Independent Sales Agents and that percentage is expected to rise. As an integral part of the

Debtors sales force, the Independent Sales Agents are essential to the Debtors ability to generate

new business and revenue. The services of these parties cannot be replaced at reasonable costs

or without substantial hardship to the Debtors. The Debtors have filed a motion seeking

authority to, among other things, satisfy their prepetition obligations to their Independent Sales

Agents, and for the reasons set forth above, I believe that granting the requested relief is in the

best interests of the Debtors, the creditors, and all parties in interest.

E.

Certain Other Motions.

(1) Motion to Provide for Adequate Assurance to Utilities.70. In connection with the operation of their businesses and management of

their properties, the Debtors obtain water, natural gas, electricity and other similar utility

products and services (collectively, the Utility Services) from approximately seven (7) utility

companies (collectively, the Utility Companies). The Debtors also have relationships with

certain carriers (the Carriers) by which the Debtors purchase facilities and services (the

Carrier Services). The Debtors are seeking an order of this Court prohibiting the Utility

Companies and Carriers (collectively, the Service Providers) from altering or discontinuing

services and deeming the Service Providers adequately assured of future performance by virtue

of the Debtors proposed adequate assurance.

71. To provide adequate assurance of payment for future services to theUtility Companies, the Debtors proposeto provide a deposit equal to two (2) weeks of Utility

Service, calculated as a historical average over the past twelve (12) months, to any Utility

Company who requests such a deposit (the Adequate Assurance Deposit). To provide

adequate assurance of payment for future services to the Carriers, the Debtors propose to pay all



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undisputed invoices related to prepetition and postpetition Carrier Services in the ordinary course

of business (the Carrier Adequate Assurance).

72. I believe that the Debtors Adequate Assurance Deposit and CarrierAdequate Assurance constitute sufficient adequate assurance to the Utility Companies and

Carriers, respectively. However, in light of the severe consequences to the Debtors of any

interruption in services by the Service Providers and the recognition that Service Providers have

the right to evaluate the proposed adequate assurance on a case-by-case basis, if any Service

Provider believes additional assurance is needed, the Debtors have proposed procedures for the

Service Providers to request such additional adequate assurance. I believe these procedures, as

outlined in the motion, are not only fair and reasonable, but also necessary for the Debtors

stability. Furthermore, the Debtors fully intend to timely comply with their postpetition

obligations to Service Providers.

73. I believe that without the relief requested in the motion, the Debtors couldbe harmed by having to address numerous requests by Service Providers in an unorganized

manner at a critical period in their reorganization efforts.

(2) Motion to Authorize Payment of Certain PrepetitionGeneral Unsecured Claims and Other Unimpaired Claims.

74. In light of the anticipated short duration of these prepackaged chapter 11cases and the proposed unimpairment and payment in full of general unsecured claims pursuant

to the terms of the Prepackaged Plan, the Debtors seek the entry of an order authorizing but not

directing the Debtors to pay the undisputed, prepetition unsecured claims that are not otherwise

covered by First Day Motions, as they come due in the ordinary course of business (collectively,

the Eligible General Unsecured Claims). In exchange, the Debtors may, as appropriate and



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necessary, seek agreements from general unsecured creditors to continue to extend prepetition

trade credit terms to the Debtors for the duration of these chapter 11 cases.

75. The overall purpose of these chapter 11 cases and the Prepackaged Plan isto implement a consensual balance sheet restructuring for the Debtors with payment in full to,

among others, all of the Debtors trade and other unsecured creditors. If these cases proceed as

anticipated, the Debtors will have sufficient liquidity through debtor-in-possession financing and

the use of their cash collateral to maintain and enhance their position as a national

communications and information technology solutions provider even while the chapter 11 cases

are pending. This continuation of business as usual is important to stave off any loss of

confidence regarding the Debtors ability to honor their obligations, which would undermine the

goals of the Prepackaged Plan and reduce the value of the Debtors estates. Accordingly, it is

critical that the Debtors assure the general unsecured creditors that they have sufficient authority

to continue to honor their obligations in the ordinary course throughout these cases.

76. The requested relief is not an attempt to prioritize certain claims overothers and is consistent with the terms of the Prepackaged Plan which proposes to unimpair the

claims of all general unsecured creditors, including the Eligible General Unsecured Claims.

Moreover, payment of the Eligible General Unsecured Claims in the ordinary course of business

will ease the administrative burden on the Debtors estates pending confirmation of the

Prepackaged Plan by eliminating the need for a bar date and claims procedures.

77. Accordingly, the Debtors request the authority to pay the undisputedprepetition claims of general unsecured creditors who agree, as applicable, to continue to provide

their goods and services on the customary credit terms that existed 120 days prior to the Petition



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Date and are not otherwise covered in the First Day Motions (e.g., carriers) as they come due in

the ordinary course of business, or on such other mutually agreeable terms and conditions.

78. For the reasons stated above, I believe that the relief sought therein isnecessary for a successful reorganization and is in the best interests of the Debtors and their

estates.

(3) Motion to Authorize Debtors to Honor Prepetition Customer Programs.79. Prior to the Petition Date and in the ordinary course of their businesses,

the Debtors sought to develop and sustain a positive reputation in the marketplace through the

implementation of certain customer programs (the Customer Programs), including discount

contracts, rebates, wholesale customer deposits, a landlord customer program, and upfront

maintenance billing. The termination of the Customer Programs would undoubtedly have an

adverse effect on the Debtors businesses and their ability to reorganize. Therefore, I believe

that the continuation of the Customer Programs is necessary to preserve the Debtors critical

customer relationships and is in the best interests of the Debtors and their estates. As of the

Petition Date, the Debtors estimate that they have a prepetition cash liability of approximately

$800,000 under the Customer Programs.

(4) Motion for Authority to Pay CertainPrepetition Sales, Use and Other Taxes and Regulatory Fees.

80. The Debtors seek entry of an order authorizing them to pay variousprepetition sales and use taxes, including a three percent federal excise tax, (collectively, the

Trust Fund Taxes), other taxes (the Other Taxes), and certain licensing, permitting and

regulatory fees (the Regulatory Fees and together with the Trust Fund Taxes and Other Taxes,

the Taxes) to various federal, state and local taxing authorities (the Taxing Authorities). In

the ordinary course of their businesses, the Debtors collect the Trust Fund Taxes from customers,



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and then send a schedule of the taxes collected to their tax auditor, who calculates the actual

amounts owed to each Taxing Authority. Based on these calculations, the Debtors transmit the

amounts owed to a third-party accounts payable service provider (the Third-Party Payor) that

ultimately transmits the Trust Fund Taxes to the appropriate Taxing Authority. The Debtors

estimate that the total amount of prepetition Trust Fund Taxes owing to the Taxing Authorities

will not exceed approximately $1.4 million. In addition, the Debtors are required to pay Other

Taxes to certain of the Taxing Authorities in order to obtain a license or permit to operate their

businesses within the applicable Taxing Authoritys jurisdiction, and Regulatory Fees including

FCC fees and fees to various state public utility commissions, many of which the Debtors also

pay to the Applicable Authorities through the Third-Party Payor. The Debtors estimate that the

total amount of prepetition Regulatory Fees and Other Taxes owing to the Applicable Authorities

will not exceed approximately $106,000 and $662,000, respectively.

81. Payment of the prepetition Taxes is critical to the Debtors continued,uninterrupted operations. The Debtors failure to pay these obligations may cause the Taxing

Authorities to take precipitous action, including, but not limited to, seeking to lift the automatic

stay, and imposing personal liability on the Debtors officers and directors, which would disrupt

the Debtors day-to-day operations and could potentially impose significant costs on the Debtors

estates. Further, failure to pay the prepetition Taxes could impact the Debtors applications to

receive state and FCC approval for their restructuring.

82. I believe that the authority to pay both the Third-Party Payor and theTaxing Authorities in accordance with the Debtors prepetition business practices is in the best

interest of the Debtors and their estates.



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(5) Motion to Restrict the Purchase orSale of Certain Claims Against, and Equity Interests In, the Debtors.

83. The Debtors seek entry of an order restricting the purchase and sale ofcertain claims against, and equity interests in, the Debtors during the pendency of these cases in

order to both aid the required change of control applications (the Regulatory Applications)

with the FCC and various state public utility companies (the PUCs) and to preserve the

Debtors valuable tax attributes. Prior to the Petition Date, the FCC and various PUCs issued

licenses to certain Debtors authorizing them to provide competitive interstate and international

telecommunications services. These licenses are essential to the operation of the Debtors

businesses. In order to maintain such licenses, the Debtors are required to file the Regulatory

Applications with the FCC and applicable PUCs for the approval of any change of control of

BVNH. The Regulatory Applications must include, among other information, the identity of

significant equityholders of BVNH (the Equityholder Information).

84. As the transactions contemplated by the Prepackaged Plan will cause achange in control of BVNH, the Debtors have submitted the Regulatory Applications to the

applicable PUCs prior to the Petition Date, and intend to submit the Regulatory Application to

the FCC in the near term. To ensure that the Debtors are in possession of all Equityholder

Information required to be disclosed in the Regulatory Applications, the Debtors request that the

Court require certain Senior Secured Noteholders or transferees thereof, other than the Required

Consenting Noteholders (whose disclosure requirements are governed by the Restructuring

Support Agreement), to provide the Debtors with the Equityholder Information.

85. Further, pending the approval of the Regulatory Applications, certainchanges in both the identity of the significant equityholders and the amount of their ownership

interests in BVNH that were previously disclosed in the Regulatory Applications may require the



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Debtors to amend the Regulatory Applications, which could delay their approval. Thus, the

Debtors request that the Court restrict the purchase or sale of Senior Secured Notes during the

pendency of these cases to the extent that such purchase or sale could require the Debtors to

amend he Regulatory Applications.

86. In addition, the Debtors estimate that, as of June 30, 2012, they hadconsolidated net operating tax loss carryforwards (the NOLs) of at least $213,568,000. As the

Debtors NOLs are valuable assets of the estates, the availability of these tax savings may prove

beneficial to the financial health and going concern value of the Debtors. In order to protect and

preserve their NOLs and other tax assets, the Debtors request that the Court authorize certain

notice and hearing procedures governing the transfer or trading in, or any claims of

worthlessness with respect to, any class or series of the common stock or the preferred stock of

BVNH.

87. I believe that the proposed restrictions upon trading certain claims against,and equity interests in, the Debtors is in the best interest of the Debtors and all of their

constituents, as the restrictions on trading Senior Secured Notes will facilitate the approval of the

Regulatory Applications as expeditiously as possible, thus allowing for a timely consummation

of the Prepackaged Plan, and the restrictions on trading BVNHs equity securities are necessary

to avoid the irreparable harm that could be caused by limitations on the Debtors ability to offset

future taxable income.

III. INFORMATION REQUIRED BY LOCAL RULE 1007-288. It is my understanding that Local Rule 1007-2 requires certain information

related to the Debtors, which is set forth below.

89. As noted on Exhibit A, an ad hoc committee of holders of Senior SecuredNotes was formed prior to the Petition Date.



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90. Concurrently herewith, the Debtors have filed a motion for authorizationto file a list of the thirty (30) largest unsecured creditors on a consolidated basis. Exhibit B

hereto provides the following information with respect to each of the holders of the Debtors

thirty (30) largest unsecured claims: (a) each creditors name, address (including the number,

street, apartment or suite number, and zip code, if not included in the post office address) and

telephone number; (b) the nature and approximate amount of such creditors claim; and (c) an

indication of whether the claim is contingent, unliquidated, disputed, or partially secured.

91. Exhibit C hereto provides the following information with respect to theholders of the five (5) largest secured claims against the Debtors: (a) the creditors name,

address (including the number, street, apartment or suite number, and zip code, if not included in

the post office address) and telephone number; (b) the amount of the claim; (c) a brief

description of such creditors claim; (d) if known, an estimate of the value of the collateral

securing the claim; and (e) whether the claim or lien is contingent, unliquidated or disputed.

92. Exhibit D hereto provides a summary of the Debtors assets and liabilities.93. Exhibit E hereto provides the number and classes of shares of stock,

debentures, and other public securities of the Debtors that are publicly held and the number of

holders thereof.

94. Exhibit F hereto sets forth a list of the property of the Debtors in thepossession or custody of a custodian, public officer, mortgagee, pledgee, assignee of rents, or

secured creditor, or agent for any such entity.

95. Exhibit G hereto sets forth a list of the owned or leased premises fromwhich the Debtors operate their businesses.



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96. Exhibit H hereto sets forth the location of the Debtors substantial assetsand the location of their books and records.

97. Exhibit I hereto sets forth the nature and present status of each action orproceeding, pending or threatened, against the Debtors or their property where a judgment or

seizure of their property may be imminent.

98. Exhibit J hereto provides a list of the names of the individuals whocomprise the Debtors existing senior management, their tenure with the Debtors and a brief

summary of their relevant responsibilities and experience.

99.

Exhibit K hereto sets forth the estimated amount to be paid to:

(a) employees; (b) officers, stockholders and directors; and (c) financial and business consultants

retained by the Debtors, for the thirty (30) day period following the Petition Date.

100. Exhibit L hereto sets forth a list of the Debtors estimated cash receiptsand disbursements, net gain or loss, and obligations and receivables expected to accrue that

remain unpaid, other than professional fees for the thirty (30) day period following the Petition

Date.



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CONCLUSION

In furtherance of their reorganization efforts, the Debtors respectfully request that

orders granting the relief requested in the First Day Motions be entered.

Dated: August 22, 2012Broadview Networks Holdings, Inc., et al.,Debtors and Debtors in Possession

/s/ Michael K. Robinson_____________________Michael K. RobinsonPresident and Chief Executive Officer



35/53

SCHEDULE 1

12-13581 Doc 3 Filed 08/22/12 Entered 08/22/12 17:22:06 Main Docum35 of 53


36/53

EXHIBIT A

Committees Organized Prior to the Order for Relief

To the best of the Debtors knowledge and pursuant to Local Rule 1007-2(a)(3), the

following entities formed the following ad hoc committee prior to the Petition Date:

Type of Committee Names of Committee

Members1

Counsel for Committee

Ad Hoc Committee of Holdersof Senior Secured Notes

BlackRock FinancialManagement, Inc.

Fidelity Management &Research Company

MSD Credit OpportunityMaster Fund, L.P.

Watershed AssetManagement, L.L.C.

Dechert LLP1095 Avenue of the AmericasNew York, NY 10036Attn: Michael Sage, Esq.

_______________________________

1 The members of the ad hoc committee are to the best of the Debtors knowledge and are based oninformation provided to the Debtors by counsel to the ad hoc committee.



37/53

EXHIBITB

30 Largest Unsecured Claims1

(on a consolidated basis)

Name of creditor and

complete mailing address,

including zip code

Name, telephone number, and

fax number of employees,

agent or department of

creditor familiar with claim

who may be contacted

Nature of

claim

(trade debt,

bank loan,

government

contract, etc.)

Amount of

claim as of

8/8/20122

Indicate if

claim

is contingent,

unliquidated,

disputed, or

subject to

setoff

Verizon Communications Inc.PO Box 37210Baltimore, MD 21297

Sherry A [email protected]

Ron [email protected]: (972) 316.3827

476 Conowingo RoadConowingo, MD 21918

Trade Debt 5,178,453

Thomson Reuters Inc.PO Box 6016Carol Stream, IL

Mercy HendonTel: (800) 327-8829 x 511

3 Times SquareNew York, NY 10036

Trade Debt 1,212,888

Global CrossingTelecommunicationsPO Box 24Champaign, IL 61824

Allen [email protected]: (585) 255-1892

110 East 59th

StreetNew York, NY 10022Tel: (212) 920-8201

1 Penn Plaza # 4530New York, NY 10123Tel: (212) 962-1776

Trade Debt 475,814

Empirix Inc.20 Crosby DriveBedford, MA 01730

George BryanTel: (781) 266-3200 Trade Debt 432,229

Sutherland Global Services1160 Pittsford-Victor RoadPittsford, NY 14534

Sento PolitoTel: (585) 705-2390 Trade Debt 410,569

UnitedHealthcare InsuranceCompany of New York22703 Network PlaceChicago, IL 60673

Melissa EdisonTel: (603) 665-5668 Trade Debt 402,970

TNS, Inc.PO Box 849985Dallas, TX 75284

Sharon [email protected]: (866) 421-6984

4501 Intelco Loop

Olympia, Washington 98503

Trade Debt 157,525

_______________________________

1 The information herein shall not constitute an admission of liability by, nor is it binding on, any of theDebtors.

2 These claim amounts represent maximum potential liabilities as of 8/8/2012. Any actual amounts owedmay be significantly lower.



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including zip code






Nature of

claim

(trade debt,

bank loan,

government

contract, etc.)

Amount of

claim as of

8/8/20122

Indicate if

claim

is contingent,

unliquidated,

disputed, or

subject to

setoff

Independence Blue CrossPO Box 70250Philadelphia, PA 19176

Farah NewcombTel: (610) 238-6528Alt: (215) 241-2000

1901 Market StreetPhiladelphia, PA 19103

Trade Debt 156,153

Sidera NetworksPO Box 644444Pittsburgh, PA 15264

Jan [email protected]: (484) 461-6058Alt: (215) 872-6212

196 Van Buren StreetHerndon, VA 20170

Trade Debt 116,891

Data Connection Limited12007 Sunrise Valley DriveSuite 250

Reston, VA 20191

D.W. BookerTel: (442) 836-6117 Trade Debt 109,557

MCI WorldComPO Box 96022Charlotte, NC 28296

Patty [email protected]: (918) 590-5511

Trade Debt 106,830

Lightower Fiber NetworksPO Box 30279New York, NY 10087

[email protected]@lightower.com

80 Central StreetBoxborough, MA 01719Tel: 978-264-6000

Trade Debt 99,413

EPlus Technology, Inc.469 Seventh Avenue5th FloorNew York, NY 10018

Greg BartoloTel: (212) 401-5016 Trade Debt 95,581

AT&TPO Box 105068Atlanta, GA 30348

Kathy Brennan

[email protected]: (800) 251-0103

4513 Western AvenueLisle, Illinois 60532

Trade Debt 92,715

FairPoint Communications, IncPO Box 37210Baltimore, MD 21297

Pauline [email protected]

770 Elm StreetManchester, NH 03101

Trade Debt 89,756

AboveNet Communications, Inc.PO Box 785876

Philadelphia, PA 19178

Gladys [email protected]

Dendariarena [email protected]: (914) 421-6755

William Scheppy, Tax Manager360 Hamilton Avenue7th FloorWhite Plains, NY 10601

Trade Debt 87,120

Neustar, Inc.PO Box 403034Atlanta, GA 30348

Rashmo [email protected]

21575 Ridgetop CircleSterling, VA 20166

Trade Debt 69,998



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including zip code






Nature of

claim

(trade debt,

bank loan,

government

contract, etc.)

Amount of

claim as of

8/8/20122

Indicate if

claim

is contingent,

unliquidated,

disputed, or

subject to

setoff

Sprint CorporationPO Box 873455Kansas City, MO 64187

Janice [email protected]: (877) 866-3840

6200 Sprint ParkwayOverland Park, KS 66251

Trade Debt 57,252

Sunesys202 Titus AvenueWarrington, PA 18976

Steve HartmanTel: (267) 927-2000Fax: (267) 927-2090

Trade Debt 37,000

Community Parents, Inc.90 Chauncey StreetBrooklyn, NY 11233

Cynthia CummingsTel: (718) 771-3498 Trade Debt 30,793

Windstream CommunicationsPO Box 60549C/O Bank of America

St. Louis, MO 63160

Charles [email protected]: (501 )748-6594

4001 North Rodney Parham RoadLittle Rock, AR 72212

Trade Debt 30,285

PAETEC Communications, Inc.One PAETEC Plaza600 Willowbrook Office ParkFairport, NY 14450

Suzanne [email protected] Trade Debt 29,227

VSS Monitoring, Inc.1850 Gateway DriveSuite 500San Mateo, CA 94404

Ricky ChanTel: (650) 697-8770Fax: (650) 697-8779

Trade Debt 28,394

World Data Products, Inc.M & I 96PO Box 1414Minneapolis, MN 55480

Jon HautalaTel: (952) 249-3282Fax: (952) 449-6326

121 Cheshire Lane#100Minnetonka, MN 55305

Trade Debt 27,1740

Visual Systems Group, Inc.7900 Westpark DriveSuite T-610McLean, VA 22102

Tammy RobesonTel: (703) 848-8217 Trade Debt 25,748

IPNETZONE Communications,Inc.38-31 Crescent Street2nd FloorLong Island City, NY 11101

Tina HarbaughTel: (646) 254-6800Fax: (724) 430-6351

Trade Debt 25,542

Pricewaterhouse Coopers LLP18 York StreetSuite 2600Ontario, CA M5J 0B2

Kent SmithTel: (613) 755-8742 Trade Debt 21,409

OneSource Building Technologies,

Inc.8300 Cypress Creek ParkwaySuite 100Houston, TX 77070

Derrick CazaresTel: (832) 782-6161 Trade Debt 20,066

Konica Minolta Business Solutions21146 Network PlaceChicago, IL 60673

Annette WarnerTel: (800) 896-2590 x 3531 Trade Debt 19,967

TeleBill Inc.6 North Main StreetSuite 214BFairpoint, NY 14450

Kelly HosmerTel: (585) 388-3360 Trade Debt 18,000



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EXHIBIT C

Holders of Five Largest Secured Claims Against the Debtors1

Creditor Mailing Address and

Phone Number

Counsel2 Approximate

Amount ofClaim3

Descript

I

The Bank of NewYork in itscapacity asTrustee, CollateralAgent and SecondPriority Agent forthe 11.375%Senior Secured

Notes

The Bank of New York101 Barclay Street, 8WNew York, NY 10286Attn: Latoya S. Elvin(212) 815-5704

Emmet, Marvin & Martin, LLP120 Broadway, 32nd FloorNew York, NY 10271Attn: Bayard S. Chapin, Esq.

$317.1 million

Second pinterest ininventoryaccounts thereto, locapital stsubsidiaramong ota first pri

interest inall of the the Debto

_______________________________

1 The Debtors have included all information reasonably available to them. In addition to the secured creditors listed hsecured leases.

2 The Debtors have provided information for counsel that are known to the Debtors as of the date hereof to creditors th

the date hereof.

3 These figures are inclusive of principal and accrued interest.



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- 2 -

The CIT Group/Business Credit,Inc. in its capacityas Administrative

Agent and FirstPriority Agent forthe $25,000,000Credit Agreement,dated as of August23, 2006

The CIT Group/Business Credit, Inc.

11 W. 42nd

StreetNew York, NY 10038Attn: Evelyn Kusold(212) 461-7725

Stradley Ronon Stevens & YoungLLP

2005 Market Street, Suite 2600Philadelphia, PA 19103Attn: Gary P. Scharmett, Esq. andPaul A. Patterson, Esq.

$14.0 million

First priointerest ininventoryaccounts thereto, locapital st

subsidiaramong ota second security isubstantiremaindeDebtors



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EXHIBIT D

Summary of Debtors Assets and Liabilities

(unaudited) (audited)

(In thousands, except share amounts)

Mar. 31,

2012

Dec. 31,

2011ASSETS

Current assets:Cash and cash equivalents $9,793 $22,924

Certificates of deposit 1,764 2,396Investment securities 13,567 13,567Accounts receivable, less allowance for doubtful accounts of $14,536 and $10,664 30,617 33,132Other current assets 10,995 9,877

Total current assets 66,736 81,896Property and equipment, net 78,665 80,593Goodwill 98,238 98,238Intangible assets, net of accumulated amortization of $40,653 and $39,747 8,875 9,747Other assets 5,805 6,259

Total assets $258,319 $276,733LIABILITIES AND STOCKHOLDERS DEFICIENCY

Current liabilities:Revolving credit facility $16,112 $17,122Senior secured notes 300,532 300,840

Accounts payable 7,381 8,105Accrued expenses and other current liabilities 19,615 29,055

Taxes payable 6,545 7,895Deferred revenues 7,984 8,045Current portion of capital lease obligations 1,775 1,867

Total current liabilities 359,954 372,929

Long-term debt Deferred rent payable 4,023 3,775Deferred revenues 1,053 1,038

Capital lease obligations, net of current portion 2,299 2,726

Deferred income taxes payable 5,221 4,979Other 808 980Total liabilities 373,358 386,427Stockholders deficiency:Common stock A $.01 par value; authorized 80,000,000 shares, issued 9,342,509 shares, and

outstanding 9,333,680 shares 107 107Common stock B $.01 par value; authorized 10,000,000 shares, issued and outstanding 360,050

shares 4 4Series A Preferred stock $.01 par value; authorized 89,526 shares, designated, issued and

outstanding 87,254 shares entitled in liquidation to $198,792 and $176,623 1 1Series A-1 Preferred stock $.01 par value; authorized 105,000 shares, designated, issued and

outstanding 100,702 shares, entitled in liquidation to $229,430 and $203,845 1 1Series B Preferred stock $.01 par value; authorized 93,180 shares, designated, issued and

outstanding 91,187 shares entitled in liquidation to $207,752 and $184,585 1 1

Series B-1 Preferred stock $.01 par value; authorized 86,000 shares, designated and issued 64,986

shares and outstanding 64,633 shares entitled in liquidation to $147,254 and $130,834 1 1Series C Preferred stock $.01 par value; authorized 52,332 shares, designated, issued and

outstanding 14,402 shares entitled in liquidation to $25,376 and $21,717

Additional paid-in capital 140,811 140,811Accumulated deficit (255,788) (250,443)Treasury stock, at cost (177) (177)Total stockholders deficiency (115,039) (109,694)

Total liabilities and stockholders deficiency $258,319 $276,733



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EXHIBIT E

Publicly Held Securities

The Debtors are privately held corporations. Accordingly, there are no shares of

stock of the Debtors that are publicly held. The Debtors publicly held debt securities are:

Type of Security Outstanding Principal

Amount

Number of Record Holders

as of 7/11/2012

11.375% Senior Secured

Notes, due September 2012$300,000,000.00 50



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EXHIBIT F

Debtors Property Not in the Debtors Possession

Pursuant to Local Rule 1007-2(a)(8), the table below lists the Debtors property in

the possession or custody of any custodial, public officer, mortgagee, pledge, assignee of rents,or secured creditor, or agent for any such entity.

In addition, certain of the Debtors landlords and utilities, including the ILECs,hold security deposits. Certain third parties may hold prepayments on account of servicesperformed for the Debtors.

Debtor Entity Description of

Property

Person or Entity in

Possession of the

Property

Address of Person or Entity

in Possession of the Property

Broadview Networks

Holdings, Inc.

$400,000, cash

collateral forappellate bond

United States Court

of Appeals for theThird Circuit

Office of the Clerk

21400 U.S. Courthouse601 Market StreetPhiladelphia, PA 19106



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EXHIBIT G

Debtors Premises

Pursuant to Local Rule 1007-2(a)(9), the following lists the premises owned, leased, or he

from which the Debtors operate their businesses. In addition to the properties listed below, the Debtors lswitching facilities and collocation facilities and/or similar sites and facilities necessary to its business opNortheast United States.

Debtor/Lessee Address Lease Expiration Date Broadview Networks, Inc. 500 7th Ave., 2nd Floor

New York, NY 10018June 2019 Le

Broadview Networks, Inc. 500 7th Ave., 12nd FloorNew York, NY 10018

April 2015 Le

Broadview Networks, Inc. 1018 W. 9th Ave.King of Prussia, PA 19406

January 2022 Le

Broadview Networks, Inc. 601 W. 26th St.New York, NY 10001

December 2022 Le

Broadview Networks, Inc. 1000 Atrium WayMt. Laurel, NJ 08054

February 2017 Le

Broadview Networks, Inc. 8229 Boone Blvd.Vienna, VA 22182

May 2014 Le

Broadview Networks, Inc. Three Huntington QuadrangleMelville, NY 11747

October 2018 Le

Broadview Networks, Inc. 221 Central Ave.Farmingdale, NY 11735

June 2015 Le

Broadview Networks, Inc. 230 Congress St.Boston, MA 12110

July 2020 Le

Broadview Networks, Inc. 809 Gleneagles Ct., Suite 200Towson, MD 21286

September 2012 Le

Broadview Networks, Inc. 1275 Glenlivet Drive, Suite 300

Allentown, PA 18106

January 2017 Le

Broadview Networks, Inc. 1250 Hancock St., 6th FloorQuincy, MA 02169

October 2018 Le

Broadview Networks, Inc. 224 Harrison St., 4th FloorSyracuse, NY 13202

September 2014 Le

Broadview Networks, Inc. 1 Hines RoadOttawa, ON K2K 3C7 Canada

June 2013 Le

12-13581 Doc 3 Filed 08/22/12 Entered 08/22/12 17:22:06 Main Docum45 o

broadview first day decl

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