Charter Communications said Thursday it would file for Chapter 11 bankruptcy protection by April 1 and all shareholders' equity will be canceled. All company operations will continue while the company refinances its debt.
Charter subsidiaries missed debt interest payments of $74 million on Jan. 15, prompting Moody's to downgrade their debt rating and state that the company would likely have to file for Chapter 11 protection.
All debt holders will be compensated fully, and Microsoft co-founder Paul Allen will remain the largest voting interest in the company. The company expects savings of $8 billion from the restructuring.
The first stirrings of Charter's bankruptcy filing started last month, as it eliminated an executive awards program and other bonus payouts. Though the company has shown moderate growth over the past year, it was simply too highly leveraged to turn the corner, and the current lending climate made refinancing next to impossible.
For more:
- see the Associated Press report here
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