Cable Company Charter Filing For Bankruptcy

Cable operator Charter Communications - controlled by Microsoft co-founder Paul Allen - will be filing for Chapter 11 bankruptcy in a bid to restructure.

Cable operator Charter Communications—controlled by Microsoft co-founder Paul Allen—has announced it has reached a deal with investors to restructure the company under Chapter 11 bankruptcy protection. The deal will reduce Charter’s debt by about $8 billion, with investors and bondholders getting a mix of new stock, equity stakes, and cash depending on their seniority. Paul Allen will maintain a controlling interest in the company, but holders of common stock will be left holding the bag: the stock will be canceled and holders won’t see a penny.

Charter said in a statement is plans to file for Chapter 11 protection on or before April 1, 2009. Charter’s stock has recently been trading below $0.10 a share; the announcement had plunged its price below $0.04 a share in end-of-day trading.

According to the company’s fourth quarter results, Charter has about $800 million in cash; the company says it expects to make an overdue $74 million interest payment on its debt before February 15.

Charter is headquartered in St. Louis, Missouri, and provides cable, voice, and broadband services to approximately 5.5 million customers in 27 states.