Charter may be getting its day in bankruptcy court, but the ride is only getting bumpier as Charter's main bank lenders J.P. Morgan and Wells Fargo are accusing the cable MSO's bondholders of giving them a raw deal. At issue is the proposed plan that would not only allow Charter to rid itself of $8 billion in debt, but also reinstate about $11 billion of senior bank debt. Interestingly, the plan allows founder and Chairman Paul Allen to retain financial control as well as to appoint four of the 11 reorganized company directors. According to reports in CED Magazine and Reuters, Charter bondholder Apollo Global Management would be able to name two directors, while Oaktree Capital Management and Franklin Advisers could name one director each.
Not surprisingly, JP Morgan and Wells Fargo object to the plan. Peter Pantaleo, an attorney for JPMorgan, said, "Bondholders can't engineer a takeover by putting the company into bankruptcy and using our money to finance their takeover."
- CED has this article
Creditors file objections to Charter's reorg plan