By Phil Wahba
NEW YORK, Oct 15 (Reuters) - The judge overseeing the bankruptcy of Charter Communications Inc said on Thursday that the U.S. cable operator's reorganization plan to exit bankruptcy should be approved, but warned his decision was not final yet.
Charter's proposed reorganization plan has been fiercely opposed by lenders led by JPMorgan Chase & Co and Wells Fargo, who both claim that Charter investors at private equity firm Apollo, Crestview, Oaktree and Franklin funds were acquiring Charter via the bankruptcy, and that the proposed plan would cause an improper change-in-control of the company.
Charter, which is controlled by Microsoft co-founder Paul Allen, filed for bankruptcy protection in March, buckling under $21.7 billion of debt, but said at the time it had reached agreements with key stakeholders that would allow it to exit bankruptcy in a matter of months.
If Charter wins approval of the plan from Judge James Peck it would allow the company to shed more than $8 billion in debt while also reinstating about $11.8 billion of its senior bank debt at below-market interest rates upon its emergence from bankruptcy.
Peck of the U.S. Bankruptcy court called the reorganization plan 'reasonable' and said it effectively wipes out Allen's $8 billion investment. The judge overruled all objections to the Chapter 11 reorganization plan and said he would give a written decision confirming the plan within two to three weeks.
Under the plan, Allen would retain a 35 percent voting interest and thereby avoid triggering a change-in-control clause in its debt agreements with creditors.
JPMorgan and Wells Fargo had claimed during the trial that Apollo and others were 'acting together' to acquire Charter via the bankruptcy, and the proposed plan.
The case is in re: Charter Communications Inc., U.S. Bankruptcy Court, Southern District of New York, No. 09-11435.
(Reporting by Phil Wahba; additional reporting by Yinka Adegoke; Editing Bernard Orr) Keywords: CHARTER/ (phil.wahba@thomsonreuters.com; +1 646 223 6128; Reuters Messaging: phil.wahba.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
NEW YORK, Oct 15 (Reuters) - The judge overseeing the bankruptcy of Charter Communications Inc said on Thursday that the U.S. cable operator's reorganization plan to exit bankruptcy should be approved, but warned his decision was not final yet.
Charter's proposed reorganization plan has been fiercely opposed by lenders led by JPMorgan Chase & Co and Wells Fargo, who both claim that Charter investors at private equity firm Apollo, Crestview, Oaktree and Franklin funds were acquiring Charter via the bankruptcy, and that the proposed plan would cause an improper change-in-control of the company.
Charter, which is controlled by Microsoft co-founder Paul Allen, filed for bankruptcy protection in March, buckling under $21.7 billion of debt, but said at the time it had reached agreements with key stakeholders that would allow it to exit bankruptcy in a matter of months.
If Charter wins approval of the plan from Judge James Peck it would allow the company to shed more than $8 billion in debt while also reinstating about $11.8 billion of its senior bank debt at below-market interest rates upon its emergence from bankruptcy.
Peck of the U.S. Bankruptcy court called the reorganization plan 'reasonable' and said it effectively wipes out Allen's $8 billion investment. The judge overruled all objections to the Chapter 11 reorganization plan and said he would give a written decision confirming the plan within two to three weeks.
Under the plan, Allen would retain a 35 percent voting interest and thereby avoid triggering a change-in-control clause in its debt agreements with creditors.
JPMorgan and Wells Fargo had claimed during the trial that Apollo and others were 'acting together' to acquire Charter via the bankruptcy, and the proposed plan.
The case is in re: Charter Communications Inc., U.S. Bankruptcy Court, Southern District of New York, No. 09-11435.
(Reporting by Phil Wahba; additional reporting by Yinka Adegoke; Editing Bernard Orr) Keywords: CHARTER/ (phil.wahba@thomsonreuters.com; +1 646 223 6128; Reuters Messaging: phil.wahba.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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