Charter Communications declares bankruptcy
Cable company files for Chapter 11 after accruing $21 billion in debt
Mike Hildebrandt
Issue date: 4/6/09 Section: Campus News
The list of companies affected by the current economic climate now includes the fourth-largest cable provider in the nation - Charter Communications.
On Friday, Charter filed for Chapter 11 bankruptcy. Charter services 5.14 million customers nationally, including 514,000 in Wisconsin alone, according to a March 28 Leader-Telegram article.
According to a press release from Charter Communications, operations will continue as usual. The company decided to declare bankruptcy because of its $21 billion debt and entered into a "prearranged bankruptcy," which means that bankruptcy is declared along with a plan approved by major stockholders.
The major stockholders involved in the financial reorganization of Charter include a group called the "Bondholder Committee," a group of debt holders of the company. The Bondholder Committee has agreed in principle to invest $3 billion to help Charter, according to the press release. They had about $22 billion of debt at the end of December.
President and Chief Executive Officer Neil Smit said in a statement that Charter Communications will endure through this bankruptcy.
"The financial restructuring is good news for Charter and our customers and, if approved, will result in Charter being better positioned to deliver the products and services our customers demand now and in the future," he said in the statement.
He added that Charter will continue serving their customers throughout the process.
"We believe that Charter will be a stronger company," he said.
Senior Mike McNamara, a current Charter customer, has no problem with Charter filing for bankruptcy. He said that hopefully it will create some competition, because he thinks that Charter has a monopoly in the area.
"I think their pricing is unfair," he added.
Some bankruptcy cases, including Charter's, allow for the company to submit a plan to show how they plan on reorganizing their finances, according to uscourts.gov. In this case, the Bondholders Committee will be investing money to cover part of the debt.
Also, according to the Leader-Telegram article, some of the debt holders exchanged their debt for almost full ownership. This eliminates another $8 billion. After bankruptcy, Charter will owe about $13 billion to banks. This debt runs out beginning in 2013.
On Friday, Charter filed for Chapter 11 bankruptcy. Charter services 5.14 million customers nationally, including 514,000 in Wisconsin alone, according to a March 28 Leader-Telegram article.
According to a press release from Charter Communications, operations will continue as usual. The company decided to declare bankruptcy because of its $21 billion debt and entered into a "prearranged bankruptcy," which means that bankruptcy is declared along with a plan approved by major stockholders.
The major stockholders involved in the financial reorganization of Charter include a group called the "Bondholder Committee," a group of debt holders of the company. The Bondholder Committee has agreed in principle to invest $3 billion to help Charter, according to the press release. They had about $22 billion of debt at the end of December.
President and Chief Executive Officer Neil Smit said in a statement that Charter Communications will endure through this bankruptcy.
"The financial restructuring is good news for Charter and our customers and, if approved, will result in Charter being better positioned to deliver the products and services our customers demand now and in the future," he said in the statement.
He added that Charter will continue serving their customers throughout the process.
"We believe that Charter will be a stronger company," he said.
Senior Mike McNamara, a current Charter customer, has no problem with Charter filing for bankruptcy. He said that hopefully it will create some competition, because he thinks that Charter has a monopoly in the area.
"I think their pricing is unfair," he added.
Some bankruptcy cases, including Charter's, allow for the company to submit a plan to show how they plan on reorganizing their finances, according to uscourts.gov. In this case, the Bondholders Committee will be investing money to cover part of the debt.
Also, according to the Leader-Telegram article, some of the debt holders exchanged their debt for almost full ownership. This eliminates another $8 billion. After bankruptcy, Charter will owe about $13 billion to banks. This debt runs out beginning in 2013.
Viewing Comments 1 - 3 of 3
tom
posted 4/07/09 @ 3:42 PM CST
how can a company with over 5m customers acrue 0ver 20b in dept while collecting over 6b per year in revenue? oh yea, the same S.E.C that watched over bernie's ponzi watches over alleged "executives" that suck the cash out of companies like charter and leave the stockholders and crediters with a hand full of sand. (Continued…)
bgh
posted 4/08/09 @ 12:29 PM CST
this company has been striding deeper and deeper into debt for the past several years, the only way it fell victim to the current financial crisis is that it could not take out loans to cover the interest on the loans they have been continuously taking out to cover the interest on their earlier notes. (Continued…)
Kaycee
posted 4/16/09 @ 11:46 AM CST
I know people who work for this organization and I saw it coming along time ago. Mismanagement is an understatment. There are people who work hard and are underpaid and those who kiss up to management make more money then they are worth. (Continued…)
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