A Texas bankruptcy judge has approved the Everstream $385M Chapter 11 sale, paving the way for the Ohio-based business-only fiber internet provider to emerge from bankruptcy with a new owner.

On Friday, U.S. Bankruptcy Judge Christopher M. Lopez signed off on Everstream Solutions LLC’s $384.6 million going-concern sale to Bluebird Fiber, which topped its initial stalking-horse bid by nearly $100 million during a July auction.

“It’s always a good thing to hear that the auction was successful,” Judge Lopez remarked as he gave the green light.

The court also named Metro Everstream Bidco LLC as the backup bidder, holding a $366 million offer.

From Billion-Dollar Debt to a Lifeline Deal

Everstream, which filed for Chapter 11 in May with over $1 billion in liabilities, pointed to stiff competition, soaring operating expenses, and weaker-than-expected revenues as the catalysts for its collapse. Its initial deal with Bluebird had been valued at $285 million, before the heated auction pushed the winning bid to $384.6 million.

The company operates a fiber-optic network spanning 13 states across the Midwest and Northeast, servicing businesses with dedicated internet connectivity.

Attorney Andriana Georgallas of Weil Gotshal & Manges LLP, representing Everstream, told the court that the company plans to file its Chapter 11 reorganization plan “in the near term,” with hopes of concluding the case smoothly. A key focus, she said, was preserving jobs for employees amid restructuring.

Bluebird Expands Its Reach Across the Midwest

Missouri-based Bluebird Fiber said the acquisition will supercharge its footprint across the heartland.

“The combination of Bluebird and Everstream will form one of the largest enterprise fiber businesses in the Midwest,” said Bluebird CEO Jason W. Adkins. “We look forward to carrying traffic on our own fiber network across 11 adjacent states, from Kansas to Ohio and Michigan, and all states in between.”

Bluebird said it expects the deal to close by year-end, subject to regulatory approvals.

Everstream is represented by Clifford W. Carlson, Gabriel Morgan, Matthew S. Barr, Andriana Georgallas, and Alexander P. Cohen of Weil Gotshal & Manges LLP.