US rural broadband provider RiverStreet Communications has filed for Chapter 11 bankruptcy.

The company, which provides broadband access to roughly 30,000 customers throughout rural North Carolina and Virginia, confirmed last week that it has entered into an asset purchase agreement with funds managed by Oaktree Capital Management.

RiverStreet noted that "new ownership is expected to significantly strengthen the business’s financial foundation and provide additional resources to support its long-term success."

Inside Towers reports that the company had been removed from several broadband deployment projects following years of delays.

As such, RiverStreet said it's currently implementing a Modified Build Plan that refocuses its operations on its existing customers and footprint. The company, which was founded in 1951, said it will continue to maintain its current networks, while it intends to finish new builds that are nearing completion.

“The APA with Oaktree and the actions we are taking today are intended to ensure that this mission continues for years to come. The board of directors and management team carefully considered a range of options before making this decision, and we are confident that this is the best path for RiverStreet and our key stakeholders, including our customers and the communities where we live and work," said Eric Cramer, president and CEO, RiverStreet.

Evan Kramer, senior vice president, Oaktree, added: “RiverStreet benefits from an established customer base, meaningful network assets, and deep relationships in communities where reliable connectivity is essential, and demand is durable. We look forward to building on RiverStreet’s strengths while remaining true to its mission as a leading rural telecommunications and broadband provider."

The court-supervised sale process will facilitate an orderly transition of the expansion projects that RiverStreet intends to exit, said the company.

To support this, RiverStreet confirmed it has received a commitment for approximately $20 million in new financing from its existing lender, CoBank, ACB. This financing, together with cash generated from its ongoing operations, will support RiverStreet’s operations throughout this process.

RiverStreet has appointed Stuart Kaufman as chief restructuring officer to support the company during the court-supervised proceedings. Kaufman is a senior managing director at Areté Partners, LLC, with more than three decades of financial restructuring experience and deep financial and operational expertise.

The company added that it has also filed several customary first-day motions that seek court authorization to prop up its business operations during the court-supervised process, including the continued payment of employee wages and benefits without interruption.

RiverStreet added that it also "intends to pay vendors and suppliers in full under normal trade terms for all goods and services provided on or after the filing date."