Avaya has filed voluntary petitions under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of New York. The company has obtained a committed $725 million debtor-in-possession financing facility underwritten by Citibank.

The company’s foreign affiliates are not included in the filing and will continue normal operations.

Subject to court approval, the DIP financing, combined with the company’s cash from operations, is expected to provide sufficient liquidity during the Chapter 11 cases to support its continuing business operations and minimize disruption.

“We have conducted an extensive review of alternatives to address Avaya’s capital structure, and we believe pursuing a restructuring through Chapter 11 is the best path forward at this time,” said Kevin Kennedy, Avaya’s CEO. “Reducing the company’s current debt through the Chapter 11 process will best position all of Avaya’s businesses for future success.”

As part of Avaya’s comprehensive assessment of options to address its capital structure, the company evaluated expressions of interest in various Avaya assets, including its contact center business. After extensive evaluation in consultation with its financial and legal advisors, the Avaya board of directors has determined that focusing on the company’s debt structure is paramount and a sale of the contact center business at this time would not maximize value for Avaya’s customers and all of its stakeholders. Avaya remains in ongoing negotiations to monetize certain other assets, as appropriate, to maximize value for all stakeholders.

“This is a critical step in our ongoing transformation to a successful software and services business. Avaya’s current capital structure is over 10 years old and was put in place to support our business model as a hardware-focused company, which has evolved significantly since that time. Now, as a result of the terms of Avaya’s debt obligations and the upcoming debt maturities, we need to recapitalize the company,” Kennedy said.

Centerview Partners and Zolfo Cooper are the company’s financial and restructuring advisors. Goldman Sachs is M&A investment banker and Kirkland & Ellis is the restructuring counsel.

Avaya provides a portfolio of software and services for contact center and unified communications with integrated, secure networking— offered on premises, in the cloud or a hybrid.