(Bloomberg) -- Avaya Holdings Corp. has held talks with lenders over a plan that could hand them control of the company as part of a bankruptcy filing, according to people with knowledge of the situation.  

The Chapter 11 filing, which allows a company to keep operating while working out a plan to repay creditors, could come as soon as the end of the month, said the people, who asked not to be identified because the matter is private. The company has been in negotiations with first-lien lenders including Apollo Global Management, Ares Management and Invesco, the people added. 

The telecommunications firm has also started discussions with select lenders about potential debtor-in-possession financing to help fund the company while in bankruptcy, the people said. Talks are ongoing and plans could change, they added. 

Representatives with Avaya, Apollo and Ares declined to comment. Messages left with Invesco were not returned. 

Avaya last month disclosed that it received multiple restructuring proposals from creditor groups, with some pushing for the company to restructure via bankruptcy, while others wanted Avaya to stay out of court, according to regulatory filings. 

A potential Chapter 11 filing could open the door to litigation from certain investors who have seen their investments plunge in value, the people said. Many holders of the company’s convertible notes have elected not to enter into confidential talks with the company in order to preserve their rights to pursue litigation against management and directors if the company lands in bankruptcy court, the people said.  

Avaya drew creditor ire last year after it released preliminary results showing a sharp earnings miss compared to earlier guidance, just weeks after it sold a leveraged loan to investors. The move raised questions about how the company’s results fell so short of projections shared with lenders during the loan syndication process. 

Some investors grew concerned that the company misrepresented the health of its finances, breached its fiduciary duties and entered into bad faith negotiations, with these allegations serving as the backbone for potential lawsuits. 

Avaya previously filed for bankruptcy in 2017. 

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