💥New Chapter 11 Bankruptcy - Boundless Broadband LLC💥
Fiber optic firm files chapter 11 cases due to an uncooperative customer
On May 29, 2025, Portland, Maine-based Boundless Broadband LLC, Tilson Middle Street Holdings LLC and Tilson Technology Management Inc. (“TTMI,” and collectively with the two other companies, the “debtors”) filed chapter 11 bankruptcy cases in the District of Delaware (Judge Shannon). Through TTMI, the debtors provide digital infrastructure consulting, design-build, and maintenance services specializing in fiber and wireless networks.
The debtors have a unique history; founded in ‘96 by Mike Dow, the debtors grew rapidly following the hiring of US Army veteran, Joshua Broder, in ‘07 as Mr. Broder leveraged his experience building networks with the US Army to expand the debtors’ business into telecom. Mr. Broder ultimately became a controlling shareholder and CEO, creating a culture centered around former military vets who were accustomed to just getting sh*t done. When the whole world was falling apart during the Great Recession in ‘08, the debtors took advantage of the American Recovery and Reinvestment Act (“ARRA”) and embarked on a bunch of infrastructure projects in Maine, including deployment of a federally funded state-wide fiber optic backbone network that ultimately played a huge role in the actualization of grid modernization for Northeastern power utilities.
ARRA funds stop flowing in ‘12 and the debtors, as opportunistic as ever, transitioned to privately funded projects and started several new divisions to help with wireless carriers’ deployment of 4G and new fiber optic projects. The debtors soon became a large vendor to Verizon Communications Inc. ($VZ)(“Verizon”) and participated in Verizon’s fiber network build out, dubbed OneFiber — a relationship that led to TTMI growing to hundreds of employees just to service the Verizon relationship.
Growth continued from there. During the pandemic, the debtors acquired more and more “long term, sustainable customers” with a good amount of client, service line and geographical diversification. That is, until ‘22, when they started working for a new, very large client, Gigapower LLC (“Gigapower”) — a joint venture between Blackrock Inc. ($BLK) and AT&T Inc. ($T). Gigapower contracted the debtors to design and buildout Gigapower’s fiber networks in Las Vegas and two towns in Arizona. This work represented ~$600mm in contractual backlog at inception, making it the debtors’ largest project to date.
Sounds like a pretty sweet gig right? It was … for a hot minute. Then, according to CRO Richard Arrowsmith in his first day declaration, Gigapower turned shady:
TTMI anticipated the capital uses that the project would present and negotiated a contract with Gigapower that provided for adequate project cashflows and unambiguous parameters around project assumptions and responsibility for changes and delays. Ultimately, Gigapower failed to deliver on nearly all of the terms TTMI negotiated to address the cashflow risks, failed to devote sufficient resources to community communication and management of jurisdiction-imposed costs, and delayed, withheld and reduced payments without contractual basis.
He’s got examples:
“…when the City of Las Vegas ordered Gigapower to partially repave the streets after installation of its fiber, Gigapower failed to engage the city to change its approach. TTMI paid millions to paving subcontractors and even recruited and deployed its own paving crews to meet the city’s demands, despite explicit allocation of the costs of this excess paving to Gigapower in TTMI’s contract. The parties negotiated for eight months, with Gigapower withholding payment to gain negotiating leverage, before Gigapower ultimately agreed to pay these costs on a go-forward basis while strong-arming TTMI into agreeing to additional concessions on costs already incurred.”
Blackrock? A bully? Say it ain’t so??
Ultimately, Gigapower’s withheld cash payments meant the debtors lost nearly ~$109mm in net cash on the Gigapower project.
How did the debtors fill the hole? They took cash from over there and moved it over here. Like, seriously. Back to you Mr. Arrowsmith:
“The net effect of this was devastating to TTMI. The Gigapower project consumed all of the free cash flow that was coming from TTMI’s otherwise healthy adjacent business lines and customer projects, as well as the financed cash from debt and equity sources. The project also impaired the enterprise value of TTMI’s combined businesses and destroyed TTMI’s ability to raise new equity as planned. TTMI was forced to slow payments to its vendors, which impacted its ability to deliver timely for other customers. The impact on employee morale was profound, and TTMI lost valued, long-tenured employees due to both the uncertainty and necessary cost reductions.”
Which brings us to 2H’23. In need of growth capital and a safety cushion should things with Gigapower continue to go south, the debtors raised two rounds of subordinated debt and retained Bank of America Securities (“BofA”) as investment banker to raise $50mm in new equity.* Prior to the Gigapower disputes — LOL, surely you could tell that there were “disputes” on the horizon! — BofA estimated the debtors’ total enterprise value to be between $375mm and $425mm. Once they actually launched the marketing process, however, potential investors balked due to the Gigapower issues and BofA whiffed entirely. Strike 1. A second attempt to raise a smaller tranche of structured equity in 2H’24 failed for the same reasons. Strike 2.
It was time to explore the debt market again! And it has been the golden age of private credit (in case you hadn’t heard) so, naturally, it made sense to try and tap into all of that cash just sitting there waiting to be deployed. Per Mr. Arrowsmith:
“Without a path to raise equity, TTMI looked to address liquidity through a new senior credit facility with a higher leverage level, launching a process to secure private credit. After a broad process, TTMI selected Citizens Bank as lead arranger for a syndicate of private debt providers and agreed on a draft term sheet that would provide up to 1.5x more EBITDA leverage than its existing facility. Citizens was bullish on the likelihood of success, having successfully placed similar deals recently. The private debt syndication process launched on March 31, 2025….”
Let’s pause here and ask our readers a question: anyone remember what happened in the beginning of April ‘25?
Fine. We don’t have all day. This happened …
… the markets froze and Citizens Bank was unable to pursue the syndication effort.
But all wasn’t lost. The debtors felt confident that — if Gigapower lived up to its contractual obligations — they could persist until the Gigapower contract turned cash flow positive in TTMI’s favor. The debtors’ relationship with the city of Las Vegas was strong, the debt raise was still possible in time, and the debtors and an executed term sheet for a new Series G equity investment to backstop the debt raise. In late Q1’25, Mr. Broder personally provided a $10mm cash infusion via sub note to bridge the debtors to the next step.
Turns out that 👆 was a big “if.” Gigapower effectively pulled the plug in March when it allegedly withheld payments to the debtors and then officially pulled the plug in late March and late April when it terminated “for convenience” construction on all three Gigapower-related project sites. While this meant the debtors had a significant claim — perhaps as much as $115mm! — against Gigapower due to the early termination, there was no immediate cash injection and no hope of any free cash flow coming in from the terminated projects.
Hence, bankruptcy. And, yes, hence another sale bankruptcy. But given how much drama Gigapower has caused, the debtors need some cash first.
And so there’s a $150mm headline DIP, sourced from the debtors’ prepetition secured lenders. The prepetition funded debt includes a $109.6mm revolver, a $37.5mm term loan, and a $22.3mm delayed draw term loan, all under the same prepetition credit facility. Below that there’s also $74mm in subordinated unsecured notes and ~$58mm outstanding in trade debt.** The DIP will roll-up a lot of that, with only $37.5mm of the $150mm being new money ($15mm interim); it carries an interest rate of SOFR+10% along with a closing fee of 1% and an exit fee of 5%, both on the new money portion. The debtors will also have to abide by some milestones that include a June 13 deadline for filing bidding procedures, a June 25 deadline for entering into a stalking horse APA, and a September 19 deadline for the entry of a sale order.
The debtors got all the relevant first-day relief approved at a May 30, 2025 first day hearing and we now look towards a second day hearing on June 26, 2025 at 10am ET. Presumably by then we’ll understand whether any prospective buyers see continued potential in this business.
The debtors are represented by Bernstein, Shur, Sawyer & Nelson, P.A. (Lindsay Milne, Adam Prescott, Letson Boots) and Saul Ewing LLP (Evan Miller, Monique DiSabatino, Paige Topper) as legal counsel, Alastar Partners (Richard Arrowsmith) as financial advisor, and Woodward Park Partners, LLC (Andrew Bracy) as investment banker. Bank of America, N.A. is represented by Morgan, Lewis & Bockius LLP (Jennifer Feldsher, David Shim, Jody Barillare, Brian Loughnane) as legal counsel. BMO Bank N.A. is represented by Chapman and Cutler LLP (James Sullivan) and Womble Bond Dickinson LLP (Matthew Ward) as legal counsel.
*The exact language in Mr. Arrowsmith’s declaration is “…TTMI undertook a process to secure equity financing, selecting Bank of America Securities (“BoA Securities”) to serve as its investment banker, with the objective of raising approximately $50 million of primary capital to fund growth, and secondary transactions for legacy shareholders and lenders” which, given the context and the use of proceeds, is a bit curious. Legacy shareholders wanting to cash out isn’t exactly abnormal but it’s also not the best use of these proceeds given the fact pattern.
**Pursuant to their critical vendors motion, the debtors seek to pay $4.7mm on an interim basis and $12.5mm on a final basis to certain parties with critical vendor claims.
Company Professionals:
Legal: Bernstein, Shur, Sawyer & Nelson, P.A. (Lindsay Milne, Adam Prescott, Letson Boots) and Saul Ewing LLP (Evan Miller, Monique DiSabatino, Paige Topper)
Financial Advisor: Alastar Partners (Richard Arrowsmith)
Investment Banker: Woodward Park Partners, LLC (Andrew Bracy)
Claims Agent: Omni (Click here for free docket access)
Other Parties in Interest:
Prepetition Agent and DIP Agent: Bank of America, N.A.
Legal: Morgan, Lewis & Bockius LLP (Jennifer Feldsher, David Shim, Jody Barillare, Brian Loughnane)
BMO Bank N.A.
Legal: Chapman and Cutler LLP (James Sullivan) and Womble Bond Dickinson LLP (Matthew Ward)