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10-Q - 10-Q - BROADVIEW NETWORKS HOLDINGS INCbroadviewnetworksholdingsi.htm
EX-32.2 - EXHIBIT 32.2 - BROADVIEW NETWORKS HOLDINGS INCbnhex322-9302012.htm
EX-31.2 - EXHIBIT 31.2 - BROADVIEW NETWORKS HOLDINGS INCbnhex312-9302012.htm
EX-32.1 - EXHIBIT 32.1 - BROADVIEW NETWORKS HOLDINGS INCbnhex321-9302012.htm
EX-31.1 - EXHIBIT 31.1 - BROADVIEW NETWORKS HOLDINGS INCbnhex311-9302012.htm
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Organization and Description of Business
9 Months Ended
Sep. 30, 2012
Organization and Description of Business [Abstract]  
Business Description and Basis of Presentation [Text Block]
Organization and Description of Business
Basis of Presentation
Broadview Networks Holdings, Inc. (the “Company”) is an integrated communications company founded in 1996 to take advantage of the deregulation of the U.S. telecommunications market following the Telecommunications Act of 1996. The Company has one reportable segment providing domestic wireline telecommunications services consisting of local and long distance voice services, Internet, and data services to commercial and residential customers in the northeast United States. In addition, the Company offers certain services on a nationwide basis.
The accompanying unaudited condensed consolidated financial statements have been prepared based upon Securities and Exchange Commission (“SEC”) rules that permit reduced disclosure for interim periods. These financial statements reflect all adjustments necessary for a fair presentation of the results of operations and financial condition for the interim periods shown, including normal recurring accruals and other items. The results for interim periods are not necessarily indicative of results for the full year. For a more complete discussion of significant accounting policies and certain other information, the Company’s interim unaudited financial statements should be read in conjunction with its audited financial statements as of and for the year ended December 31, 2011 included in the Company’s Form 10-K. The condensed consolidated interim financial statements include both the Company’s accounts and the accounts of its wholly owned subsidiaries. All significant intercompany transactions have been eliminated in consolidation. The Company has evaluated the impact of subsequent events through the date the condensed consolidated financial statements were filed with the SEC.
The preparation of the condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amount of revenues and expenses during the reporting period. Management periodically reviews such estimates and assumptions as circumstances dictate. Actual results could differ from those estimates.
On August 22, 2012 (the “Petition Date”), the Company, and each of its direct and indirect subsidiaries, filed voluntary petitions for reorganization under Chapter 11 of title 11 (“Chapter 11”) of the U.S. Bankruptcy Code (the “Code”) in the U.S. Bankruptcy Court for the Southern District of New York (the “Court”) with respect to a “pre-packaged” plan (the “Plan”) to effectuate a financial restructuring of the Company and each of its direct and indirect subsidiaries (the “Restructuring”). The Plan was confirmed by the Court on October 3, 2012, contingent upon the fulfillment or waiver of certain conditions contained therein. Regulatory approvals for the Plan were received by October 25, 2012. Implementation of the Plan and other relief is subject to other customary closing conditions. For additional information, see Note 2 — Voluntary Reorganization Under Chapter 11.
For the period subsequent to the Petition Date, the Company’s financial statements have been prepared in accordance with Accounting Standards Codification (“ASC”) 852, “Reorganizations”. ASC 852 requires that the Company’s pre-petition liabilities that are subject to compromise be reported separately on the balance sheet as an estimate of the amount that will ultimately be allowed by the Court.
Pursuant to ASC 852, an objective of financial statements issued by an entity in Chapter 11 is to reflect its financial evolution during the proceeding. For that purpose, the financial statements for periods including and subsequent to filing the Chapter 11 petition should distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Certain expenses, realized gains and losses and provisions for losses not directly related to ongoing operations are reflected separately in the consolidated statement of operations as reorganization charges. Cash used for reorganization items is disclosed separately. Additionally, pre-petition debt that is subject to compromise must be recorded at the allowed claim amount.