Avaya exits the Triangle, less than three years after arriving in NC

At the start of 2023, the telecommunications firm Avaya was in a much different place than it is now.

Then, it was a publicly traded company. Today, it is private.

In January, it was veering toward bankruptcy. This week, a Texas court greenlit Avaya’s path out of bankruptcy.

And until recently, the company was headquartered in North Carolina’s Research Triangle. Now, less than three years after it arrived in the area, Avaya is gone.

In the fall of 2020, Avaya relocated its corporate offices from California’s Bay Area to the Triangle, where it occupied an office park on Meridian Parkway in South Durham. The company provides clients with cloud-based communication services.

But Avaya has had a rough past year, filled with missed earnings estimates, collapsed loan agreements, a CEO change, global layoffs, and a nosediving stock price that cratered below 30 cents a share.

Last year, the U.S. Securities and Exchange Commission (SEC) opened an investigation into financial reporting at the company. Avaya launched an internal investigation into its reporting as well, saying in a Feb. 10 filing to the SEC that there had been “control deficiencies” at the company.

The company appeared poised for bankruptcy, and on Feb. 14, Avaya filed for Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas. It was the company’s second bankruptcy in six years.

On the same day, Avaya informed federal regulators it had moved its corporate headquarters from Durham to Morristown, New Jersey. Its Meridian Parkway office building is now closed.

In a statement to The News & Observer, a company spokesperson said Avaya moved its headquarters to bring its executive team “closer together.”

According to the company, all of its Durham-area employees were offered the option to work remotely, as many were already doing. Avaya did not answer a question about how many employees it has in the Triangle.

“North Carolina has been an important home to Avaya over the past several years, and we look forward to maintaining a presence in the state through our local teams,” the company’s statement read.

Avaya emerges from Chapter 11 as a private company

On Wednesday, the Southern District of Texas bankruptcy court confirmed Avaya’s “Plan of Reorganization,” which the company says will reduce its debt obligations by more than 75%.

“I am pleased with our progress as we prepare to complete this critical step of our business model transformation,” Avaya Chief Executive Officer Alan Masarek said in a statement.

Avaya will now operate as a private company supported by investment firms Apollo Global Management and Brigade Capital Management.

Getting its reorganization plan approved enables Avaya to proceed with a lower debt load, said Ed Boltz, a bankruptcy attorney at the Law Offices of John T. Orcutt in Durham.

“In a Chapter 11, the confirmation of a plan of reorganization by the court basically means that it has emerged from bankruptcy,” he said.

Avaya hopes brighter days lie ahead for the company. But those won’t be in Durham.

This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work.

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