Tracking Charter

4:20 PM -- While all eyes are on Nortel Networks Ltd. 's bankruptcy filing today, the U.S.'s fourth-largest cable MSO may not be all that far behind. (See Nortel Files for Bankruptcy Protection.)

Indicating that it could be inching closer to a debt restructuring plan launched late last year, Charter Communications Inc. made several moves recently that affect how some of its top brass is compensated.

Charter outlined them in a 8-K filed today, showing it has altered some bonus programs and done away with an executive cash award plan.

Last month, debt-ridden Charter hired Lazard LLC to fire up discussions with MSO bondholders about "financial alternatives" designed to apply some lipstick the operator's ugly balance sheet. (See Charter Seeking 'Financial Alternatives' , and NYSE Warns Nortel.)

Charter has not used the "B word" yet among its possibilities, but some analysts have already downgraded the stock for fear that a bankruptcy may be in the MSO's future, a future that's already reached smaller MSOs such as Broadstripe LLC. (See Analyst Chops Charter and Broadstripe Turns to Chapter 11 .)

Today, Miller Tabak analyst David Joyce told Multichannel News that the new filing "is another indication that they are possibly headed toward a prepackaged bankruptcy."

Although the exec cash award plan is going away, Charter still doled out cash to some execs who were slated to see the plan vest at the end of 2009: CEO Neil Smit ($1.19 million); COO Mike Lovett ($1.21 million), EVP and general counsel Grier Raclin ($473,452); and CFO Eloise Schmitz ($386,330). However, they'll have to return those respective full amounts should any of them they leave Charter (via termination or voluntarily) before the end of the year, so these look and smell a lot like retention bonuses.

— Jeff Baumgartner, Site Editor, Cable Digital News

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