Windstream Holdings Inc. of Little Rock filed Chapter 11 bankruptcy on Monday, less than two weeks after a federal court judge found that the 2015 spinoff of its fiber and copper assets into a separate company ran afoul of bond requirements, exposing the company to a $310 million judgment.

In a news release, the firm called the filing “a necessary step to address the financial impact” of the judge’s decision and “the impact it would have on consumers and businesses across the states in which we operate.” 

“Taking this proactive step will ensure that Windstream has access to the capital and resources we need to continue building on Windstream’s strong operational momentum while we engage in constructive discussions with our creditors regarding the terms of a consensual plan of reorganization,” CEO Tony Thomas said. “We acted decisively to secure the long-term financial stability of Windstream, and we are confident that, upon completion of the reorganization process, we will be even better positioned to invest in our business, expand our speed and capabilities for our customers and compete for the long term.”

The firm said it would have more information on a website it set up for the restructing.

More: See Windstream’s Chapter 11 bankruptcy filing.

Shares of Windstream (Nasdaq: WIN), which had already declined since the judge’s ruling, were down about 25 percent Monday to about 65 cents per share.

Windstream, itself a spinoff of the old Alltel Corp. of Little Rock, reported $5.8 billion in revenue in 2017. It employs about 13,000 companywide, including about 1,200 at Arkansas.

U.S. District Court Southern District Judge Jesse Furman’s Feb. 15 ruling came in lawsuit brought by Aurelius Capital Management of New York, which alleged that Windstream’s 2015 spinoff of its copper and fiber assets into a real estate investment trust violated the terms of some of its outstanding bonds.

The spinoff is publicly traded Uniti Group Inc. of Little Rock, led by CEO Kenny Gunderman and originally called Communication Sales & Leasing Inc. Shares of Uniti (Nasdaq: UNIT) were down about 2 percent Monday to $9.05 per share.

Windstream executives had expressed confidence amid the legal wrangling, but also warned that, should the court find it in technical default on the bonds, it could be on the hook to repay bondholders immediately or forced into bankruptcy.

In its legal filings, Windstream alleged that “Aurelius acquired its position” as bondholders “for the sole purpose of seeking to manufacture this alleged default, and declare that a credit event has occurred or is occurring, in order to collect a credit default swap payoff.”

In comments after the ruling, Thomas said the company was “disappointed” and “frankly surprised” and said executives would pursue “all available options, including post-trial motions and an appeal. He said the firm would also work with creditors on the next course of action. 

Aurelius posted its own response to the ruling, saying the company could have “easily” averted the outcome “first by not playing fast and loose with its noteholders in 2015” and “second by settling. 

“Instead, Windstream wasted an exorbitant amount — more than would have been needed to settle with us at the time — on an ineffective exchange offer and then on litigation,” Aurelius said. “In our view, a management and a board with an extreme and unwarranted assessment of Windstream’s legal case chose to bet the company. The company lost.”

Last week, in light of the court ruling, Windstream postponed its fourth-quarter and full-year 2018 financial results, originally scheduled for Feb. 21. It now says it will release results “no later than March 18.”

Thomas, who has led the company since 2014, talked about the Uniti spinoff during an address to the Little Rock Rotary Club in 2016, as Windstream marked its 10th anniversary. He said the spinoff allowed Windstream to pay off $800 million in debt and improve its infrastructure.

“The idea sounds a little crazy the first 12 times you hear it, but once you hear it the 13th, it’s a compelling way to create value for our shareholders but also our customers,” Thomas said.