How does that work, exactly, when they keep raising and raising and raising the bill? Some economic genius, please explain to me how a humongous company can go broke while maintaining a total area monopoly... simultaneously shaking people down for more and more bucks... not to mention the endless nickle and diming with ridiculous service fees. And they went broke? Say what?
I don't get it. And it is not explained in the following piece, either, it just says Charter was "struggling." Okay, why are they struggling?
(Let's hope we get some choices now, but I won't hold my breath.)
Charter Communications to file Chapter 11
The Associated Press • February 12, 2009
Does this mean we still have to pay the bill? :P
PHILADELPHIA — Struggling Charter Communications Inc., the nation's fourth largest cable operator, said Thursday that it plans to file a prearranged Chapter 11 bankruptcy by April 1.
Charter, which is controlled by Microsoft co-founder Paul Allen, said it has reached an agreement in principle with certain debt holders to reduce its debt by $8 billion in exchange for combinations of new debt, cash, common shares, warrants to buy stock and preferred shares.
Allen will remain as an investor and retain the largest voting interest in Charter. But Charter's common stock will be canceled, meaning shareholder stakes will be wiped out. Allen has invested over $7 billion in the company.
In a prearranged bankruptcy, a company enters into reorganization with a plan to emerge that has the approval of major stakeholders.
Charter also said two of its subsidiaries will make a $74 million interest payment before the 30-day grace period for debt that was due on Jan. 15 expires. About $1.9 billion of debt comes due next year. Overall, more than half of Charter's $21 billion in total borrowings will mature by 2013.
Charter reported that fourth-quarter revenue is expected to increase by 6.6 percent to $1.66 billion, with adjusted earnings before interest, taxes, depreciation and amortization up nearly 10 percent to $620 million.
Charter has been skirting insolvency for years, but this time it faces a brutal combination of tight credit and billions of debt coming due. The company hasn't recorded a profit since it went public in 1999.
Shares of Charter tumbled 4 cents, or 54.6 percent, to about 3 cents afternoon trading. The stock earlier hit a low of 2.5 cents.