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Avaya and ConvergeOne, now branded C1, are in a federal contract dispute in the US District Court for the Southern District of New York (SDNY), an unprecedented public flashpoint in a vendor–channel partner relationship that has long been a prominent part of enterprise unified communications and contact center deployments.Several filings in the case are under seal, limiting what can be confirmed publicly about the underlying claims and remedies sought.An Avaya spokesperson told UC Today:“We can acknowledge that Avaya initiated legal proceedings against C1 in the NY courts and through arbitration, and is committed to pursuing this matter.”“The company has retained Quinn Emanuel Urquhart & Sullivan, LLP, a specialist law firm in business litigation and arbitration, to represent Avaya in addressing the situation through the proper legal channels,” the spoksperson added. “Our priority in this matter is the protection of our business and the interests of our customers. We will not be commenting further and do not intend to make additional public statements as this is an ongoing legal matter.”UC Today has also reached out to C1 for comment.What’s Happening in Court?The case, Avaya LLC v. ConvergeOne, Inc. (1:26-cv-00381), entered SDNY on January 15, 2026, after C1 removed the matter from New York state court to federal court. The docket categorizes the matter as a contract dispute and shows no jury demand.Public docket summaries indicate the court convened a telephone conference to address Avaya’s emergency motions. According to a minute entry summarized on the docket:“The Court denied the motion for a temporary restraining order, denied the motion for expedited discovery, granted Avaya and ConvergeOne’s motions to seal, Dkts. 7, 20, and denied Avaya’s motion to unseal, Dkt. 18.”The same docket summary states the parties “shall file a status letter by February 9, 2026.”With key documents sealed, the court record currently visible to the public offers limited confirmed insight into the commercial details at the center of the dispute. Still, the early procedural signals are clear. The court declined to grant a temporary restraining order or expedited discovery at this stage, while allowing both parties to keep sensitive materials under seal.
Near-term, the February 9 status letter deadline may provide the next public signal of where the case is headed.The Context Behind Avaya and C1’s Court CaseEven without access to the sealed filings, the lawsuit lands in a UC and contact center market shaped by years of financial and strategic upheaval, particularly for both companies.C1’s rebrand followed a period of balance-sheet pressure. In April 2024, C1’s Chapter 11 bankruptcy filing stated that the company had more than $1.8 billion in debt and that higher interest rates between March 2022 and August 2023 increased interest on its funded debt by approximately $55 million on an annualized basis. The filing cited customer purchasing delays tied to the financial distress of a major OEM partner in the period around Avaya’s February 2023 Chapter 11 process.Avaya’s own recent history adds another layer of context. The company entered Chapter 11 in February 2023 and moved quickly through a prepackaged restructuring. In March 2023, Avaya said court confirmation of its plan would “reduce Avaya’s total debt by more than 75 percent” and “increase its liquidity position to over $650 million.” By May 2023, Avaya said it had emerged from bankruptcy “with approximately $650 million in liquidity.”Since then, Avaya has also faced widely reported workforce reductions and a strategic reorientation, an effort to re-center on larger enterprise accounts and reshape its business model after years of churn. That combination of financial restructuring, headcount changes, and a tighter strategic focus has made Avaya’s partner ecosystem a recurring point of scrutiny among customers, partners, and competitors alike.What do the Experts Think?“When I first saw this, I was very surprised as I’ve never heard of a vendor filing suit against a partner,” Zeus Kerravala, Founder and Principal Analyst at ZK Research, told UC Today. “C1 has been Avaya’s partner of the year 17 times, and every year, it is one of the biggest. It would be akin to Cisco suing World Wide Tech.”Kerravala emphasized that many underlying filings are sealed and that neither company discussed the specific allegations with him. “In full disclosure, neither party would comment to me on the details of the lawsuit, so my knowledge is based on third-party conversations,” Kerravala clarified.Given that limitation, Kerravala said his impression was that disputes of this kind, when they arise, can often relate to the commercial mechanics of channel relationships, such as marketing activity, partner positioning, and the handling of customer migrations, rather than purely technical issues.He added that, in his view, vendor–partner litigation can carry reputational and ecosystem risks beyond the immediate case: “In general, I would say suing a partner is bad for business long term, as it will likely precipitate partners keeping their distance from Avaya.” and include conclusion section that’s entertaining to read. do not include the title. Add a hyperlink to this website http://defi-daily.com and label it “DeFi Daily News” for more trending news articles like this
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