Bankruptcy Court Approves Charter’s Reorg Plan; Could Emerge From Chapter 11 Within Weeks
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Nearly eight months after Charter Communications (NSDQ: CHTR) filed for Chapter 11, a bankruptcy court judge has endorsed the cable operators reorganization plan, the company announced. The news comes a day after it was disclosed that the St. Louis-based company’s chairman, Paul Allen, has been diagnosed with non-Hodgkin lymphoma.
SEE ALSO: Paul Allen Diagnosed With Non-Hodgkin Lymphoma
Going forward, Allen will be classified merely as an investor in the company, albeit one with the largest stake. Specifically, Allen will retain a 35 percent interest in Charter, but when the dust settles, he will have lost $8 billion in the bankruptcy, Reuters reports. In his 82-page opinion, US District Court Judge James Peck summed it up: “No one seriously disputes that Mr. Allen is walking away from his investment in Charter and is agreeing to maintain his voting power as a structuring device that benefits Charter and its stakeholders. In practical terms, Charter will cease to be a Paul Allen company.”
As it stands now, the majority of Charters’ share will be divided among PE firms Apollo, Crestview, Franklin Templeton and Oaktree. The firms will inject about $1.6 billion in new capital into Charter.
In giving his assent to Charter’s plan, Judge Peck dismissed senior lenders led by JPMorgan Chase’s argument that the cable operator violated the terms of its loan by defaulting on the debt before it filed for Chapter 11. But since the senior lenders have been paid back, their opposition was considered null by the judge.
Charter filed for bankruptcy back in March, as the company struggled with $21.7 billion in debt. In an interview with Reuters (NYSE: TRI), CEO Neil Smit discussed the new flexibility the cash-flow positive Charter will have, saying the company expects to completely cast off the Chapter 11 yoke “in the next several weeks.”
Posted In: Media & Publishing, TV, Cable & Telecom, Money, Bankruptcy
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