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Charter Bankruptcy Update

5:05 PM -- Charter Communications Inc. has amended its "pre-arranged" bankruptcy plan, tweaking it with a provision that will bump up the amount of preferred stock it will issue.

Under the revised plan, holders of Charter's convertible senior notes will get 15 percent payment-in-kind preferred stock in the reorganized company and "potential amounts" from a litigation escrow. Among other specific changes, the plan adjusts the terms of the new preferred stock to:


  • Increase the amount from $72 million to $138 million.
  • Change the mandatory redemption rate from seven years after issuance to five years.
  • Adjust the changes in the dividend rate so the new preferred stock would have an increase in dividend rate to 17 percent and 19 percent in years four and five, respectively.
  • Provide for the listing of the new preferred stock on an exchange along with Charter's new common stock.

Those are the items the U.S. Bankruptcy Court for the Southern District of New York will be chewing on before it commences a hearing to consider the new plan the morning of July 20, 2009.

Charter filed its Chapter 11 petitions on March 27, establishing the groundwork for a reorg that aims to trim the company's debt by $8 billion. It still hopes to emerge from bankruptcy later this year. (See Charter Turns to Chapter 11.)

— Jeff Baumgartner, Site Editor, Cable Digital News

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