8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): March 24, 2013

Otelco Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware	1-32362	52-2126395
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

505 Third Avenue East, Oneonta, AL 35121

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (205) 625-3574

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) 

Item 1.03. Bankruptcy or Receivership.

On March 24, 2013, Otelco Inc. (the “Company”) and each of its direct and indirect subsidiaries (together with the Company, the “Debtors”) filed voluntary petitions for reorganization (the “Chapter 11 Cases”) under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) in order to effectuate the Debtors’ prepackaged chapter 11 plan of reorganization. The Chapter 11 Cases are being jointly administered under the caption “In re Otelco Inc., et al.,” Case No. 13-10593. The Debtors will continue to operate their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court.

Item 2.04. Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.

The information included in Item 1.03 above is incorporated herein by reference.The filing of the Chapter 11 Cases on March 24, 2013 constituted an event of default and triggered the automatic and immediate acceleration of debt outstanding under the terms of certain instruments and agreements relating to financial obligations of the Debtors (the “Accelerated Financial Obligations”). The material Accelerated Financial Obligations include:

· Approximately $162.0 million of secured term loan obligations under that certain Second Amended and Restated Credit Agreement, dated as of October 20, 2008, by and among the Company, as borrower, the other credit parties signatory thereto, as credit parties, the lenders signatory thereto from time to time, as lenders, General Electric Capital Corporation, as administrative agent, agent and lender, GE Capital Markets, Inc., as lead arranger and sole bookrunner, and CoBank, ACB, as co-lead arranger and lender, which became immediately due and payable upon the filing of the Chapter 11 Cases; and

· Approximately $107.7 million aggregate principal amount of the Company’s 13% Senior Subordinated Notes due 2019 that were issued under that certain Indenture, dated as of December 21, 2004, as supplemented on July 3, 2006, July 5, 2007, October 31, 2008, June 8, 2010, October 1, 2011 and October 14, 2011, among the Company, the subsidiary guarantors party thereto and Wells Fargo Bank, National Association, as trustee, the principal, premium, if any, and interest on which became immediately due and payable upon the filing of the Chapter 11 Cases.

The Debtors believe that any efforts to enforce the payment obligations under the Accelerated Financial Obligations are stayed under the Bankruptcy Code as a result of the filing of the Chapter 11 Cases in the Bankruptcy Court.

Item 8.01. Other Events.

On March 25, 2013, the Company issued a press release announcing the Debtors’ filing of the Chapter 11 Cases. A copy of that press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. 

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Item 9.01. Financial Statements and Exhibits.

Exhibit No.	Description
99.1	Press Release of the Company, dated as of March 25, 2013

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	OTELCO INC.
	(Registrant)
Date: March 25, 2013
	By:	/s/ Curtis L. Garner, Jr.
		Name: Curtis L. Garner, Jr.
		Title: Chief Financial Officer

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EX-99.1

Exhibit 99.1

GROWING STRONGER TO SERVE YOU BETTER

News Release

Contact:	Curtis Garner
	Chief Financial Officer
	Otelco Inc.
	205-625-3571
	Curtis@otelcotel.com

OTELCO TAKES NEXT STEPS TO IMPLEMENT RESTRUCTURING

ONEONTA, Alabama (March 25, 2013) - Otelco Inc. (NASDAQ: OTT; TSX: OTT.un), a wireline telecommunication services provider in Alabama, Maine, Massachusetts, Missouri, New Hampshire, Vermont and West Virginia, announced today that on March 24, 2013, the Company filed voluntary petitions for reorganization under chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. Otelco filed for chapter 11 in order to implement its “pre-packaged” financial restructuring plan – a plan that already has been accepted by 100% of the Company’s senior lenders, as well as holders of over 96% in dollar amount of Otelco’s senior subordinated notes who cast ballots. Otelco’s restructuring plan will strengthen the Company by deleveraging its balance sheet and reducing its overall indebtedness by approximately $135 million.

Otelco will maintain normal day-to-day business operations and continue to provide its customers with quality services throughout the restructuring. The Company’s plan provides for suppliers and vendors to be paid in full during and after the restructuring process and for employees to continue to receive their usual pay and benefits.

Because of the overwhelming support Otelco’s plan has received from both its secured and unsecured creditors (including holders of the Company’s IDS units), Otelco anticipates that the Company will be able to complete its financial restructuring at the end of the second quarter of 2013.

“Our proposed plan represents the best possible outcome for the Company and our IDS unit holders, and I am gratified that our stakeholders have expressed their support in overwhelming numbers,” stated Michael Weaver, CEO of Otelco. “Our focus will now be on quickly implementing the restructuring with no impact on our day-to-day operations.” Implementation of the restructuring plan and other relief is subject to court approval, regulatory approvals and other customary closing conditions.

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505 3^rd Ave East  Ÿ  Oneonta, AL 35121 Ÿ Phone 205-625-3571 Ÿ Fax 205-274-8999 Ÿ www.OtelcoInc.com

Otelco Takes Next Steps to Implement Restructuring
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March 25, 2013

The Company’s restructuring counsel is Willkie Farr & Gallagher LLP and its financial advisor is Evercore Partners. The restructuring counsel for the administrative agent for the senior lenders is King & Spalding LLP and its financial advisor is FTI Consulting.

FORWARD LOOKING STATEMENTS

Statements in this press release that are not statements of historical or current fact constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties, and other unknown factors that could impact the Company’s restructuring plans or cause the actual results of the Company to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. In addition to statements which explicitly describe such risks and uncertainties, readers are urged to consider statements labeled with the terms “believes,” “belief,” “expects,” “intends,” “anticipates,” “plans,” or similar terms to be uncertain and forward-looking. There can be no assurance that the restructuring transaction described herein will be consummated. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in the Company’s filings with the Securities and Exchange Commission.

ABOUT OTELCO

Otelco Inc. provides wireline telecommunications services in Alabama, Maine, Massachusetts, Missouri, New Hampshire, Vermont and West Virginia. The Company’s services include local and long distance telephone, network access, transport, digital high-speed data lines and dial-up internet access, cable television and other telephone related services. With approximately 98,000 voice and data access lines, which are collectively referred to as access line equivalents, Otelco is among the top 25 largest local exchange carriers in the United States based on number of access lines. Otelco operates ten incumbent telephone companies serving rural markets, or rural local exchange carriers. It also provides competitive retail and wholesale communications services through several subsidiaries. For more information, visit the Company’s website at www.OtelcoInc.com.

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