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Charter Files For "Prearranged Bankruptcy"
jamie points out news that Charter Communications filed for "prearranged" Chapter 11 bankruptcy on Friday, primarily to reorganize some of the $21.7 billion in debt it has accrued. Quoting:
"The St. Louis-based company seeks to emerge from bankruptcy as early as the end of summer and doesn't plan on selling any of its assets to competitors. After Chapter 11, interest costs at Charter, which has never posted a profit since going public in 1999 due to massive debt interest payments, will be cut in half to $830 million a year. The filing restructures about $8 billion of debt at Charter, which is controlled by Microsoft Corp. co-founder Paul Allen, but leaves about $13 billion of debt on its books. Allen will control 35 percent of the votes in the reorganized company. In the bankruptcy, Allen's 51 percent equity stake in the cable operator will be wiped out, along with shares of other stockholders. Allen also holds some debt and preferred stock."
How much free mney do they need? $25 billion? Heck, let's be safe and give them 10x that... $250 billion.
How can a company be allowed to get 13 BILLION into debt!
A financial setback like this might cause him to lose a house... Imagine being fourth homeless...
http://twitter.com/OLDTELEGRAM
I was a cable internet customer, with Charter, for several years. It was flaky and crapped out at least once a month, and their service sucked. THey completely rewired my lot twice, each tech saying that the previous tech used the wrong cable, or just somehow did it all wrong. Can't say I'm sad to see Charter suffer.
Currently have FiOS, the 15 Mbit download is pretty cool. Only had one minor problem and their support was good, and called back to make sure I was satisfied with their service.
Hope this doesn't sound like a rant - but when we went over to the fiber optic service, the tech told us that Charter and other cable companies were driving a lot of frustrated people over to them.
Alan
That works out to about $481 of debt per customer.
now we need to go OSS in diesel cars
They only have 5.5M customers. So $2363 of debt per customer. How long will it be to pay THAT off?
now we need to go OSS in diesel cars
As a former Charter customer all I can say is that they should just sell off all that company's assets wholesale. There's a reason why this company is hemorrhaging money, it's not just because of their massive amounts of debt, it's the crappy way they treat their customers.
Charter's customer service made me long for Comcast's we-only-mildly-screw-you service. There was an entire MONTH where Charter in San Luis Obispo didn't know how to configure their damned routers so there was massive lag spikes (~2min lag spikes every 5 or so min) and about 300ms of lag when you weren't in a lag spike. They managed to get it set up in such a way that no one could directly log into AIM (it was possible through services like meebo) and if you called customer service they would first try to tell you that your computer was broken, and then that it was a "DNS issue."
They forced these miserable Moxi boxes on everyone about a year before they were available at retail. Moxi is another one of Paul Allen's ventures, and in short they were using Charter's customers as beta test guinea pigs. Even the sales people in Charter's regional office were blasting those damn things calling them "pieces of shit" in front of the customers!
a Charter ad on the radio the other day and was like "they're still in business?"
I know a lot of comments here are going to be about their horrible customer service, unreliable network problems, etc. I know cause I've heard a lot of friends' (in St. Louis, where I live) horror stories. Maybe I'm the only customer that has been pleased with their services. Calling customer service has always been surprisingly pleasant and my issues resolved impressively quickly.
AT&T's U-verse just became available in my area (when I moved here cable was the only option for high-speed internet, DSL didn't reach this far) but I really do not want to deal with the pain of switching my TV, DVR, internet and phone over to a different company. I already give AT&T too much money each month for my cell phone.
Charter has done good by me (so far), they're a local company and I hope they come out of this stronger. Options and competition are a good thing for the kinds of services they offer.
So, as with most bankruptcies, the shareholders will be left with worthless paper, and Paul Allen will end up dropping from 51% to 35% ownership? I sure hope he's fronting the $8B in debt forgiveness for that new share.
Is it just my observation, or are there way too many stupid people in the world?
It's no surprise that Charter filed, Paul Allen loaded the company with way too much debt during his poorly thought out cable acquisition spree in the early part of this decade. Just look at their footprint, there is no geographic rhyme or reason to it. That has hamstrung the company's operations (any free cash has to go to debt service, instead of investing in cable infrastructure). As a result, Charter is way behind upgrading its network, as any customer of theirs knows. It's no problem for a monopoly, but now Charter is facing severe competition from the telcos and of course satellite. Same thing happened to Adelphia, which eventually was consumed by TW and Comcast. But now the cable cos face a potentially bigger threat - disintermediation due to Internet/AppleTV/Boxee/Hulu etc.
It was fixed by the original poster over an hour before you posted. RTFC (comments).
M$!
Mod me down, my New Earth Global Warmingist friends!
I work for a vendor of Charter's (we also sell to other cable operators). They are just as horrible to deal with as a vendor. Clueless employees, stupid cheap (ie worried about saving $5 to the point of having to pay $20 later), and endlessly slow to make decisions. My company has approached them in the past with initiatives that would enourmously improve their customer service (hey we succeed when our customers succeed), denied not because of cost but because they felt they would do a better job internally (let's just say that we've delivered the same service to other customers and they are consistently ranked above Charter in service in the relevant industry segments). On the whole, I second the poster that said let them go under. I know their properties would be bought, and frankly TWC or Comcast would be a blessing to deal with compared to them.
Dear Sir or Madam,
Where I live I currently have two options for broadband: slow DSL (512 kb up/2 Mb down on a good day) or slow Charter cable (768 Mb up/6 Mb down). I currently have DSL installed. Do you know why?
Firstly, let me inform you that the answering service I dealt with during the incident I describe was located in St. Louis, MO, not in the Philippines.
Last summer I was using Charter's cable service. It was flakey at best. One day there was a bad storm that resulted in major flooding in town. My cable service was up the entire time and weathered the storm surprisingly well. However, long after the storm died down and at some point over the next night, my cable service went down for no particular reason!
Throughout the next day, my roommate and I placed several angry calls to try to get them to address the issue without CHARGING us for a service call.
The only thing my roommate was able to determine through his efforts, as I've mentioned above, was that we were speaking with an answering service. That is, we weren't even dealing with a dedicated Charter call center, but an answering service, the kind that also handles calls for local doctors and HVAC companies after hours. It could be possible that we had reached a dedicated department, but he learned that we were not speaking to Charter employees.
During my first call, I had to speak to a supervisor, who informed me that my call to report an outage was not enough for them to take action. She advised me to go knock on my neighbors' doors to find 5 other Charter customers who all had to be inconvenienced by calling in individually before Charter would address the issue.
On my second call, I was able to reach a more competent individual. (As a side note, I work at an answering service, and it can very frequently happen that experienced agents and supervisors are wholly incompetent at doing anything more than saying they can't do anything despite having been given training on customer-specific software. Not that I'm bitter or anything.) She was able to access some actual equipment and verify that 20/50 customers on my node were without service and told me a technician would be able to be dispatched in a few hours.
I was flabbergasted it took that much effort to find someone who could access the actual equipment. When I had a different DSL provider than I do now, the simple act of reaching someone on the phone was enough to get to someone who was able to access the equipment. Sometimes they were able to resolve the problem right over the phone by remotely configuring and troubleshooting the equipment assuming no hardware failure. I can't quite have that with my current DSL service, but their Mumbai-based call center is vastly more helpful than Charter's St. Louis, MO answering service. What's going on here?
Finally, my cable modem synched up later that night, almost 18 hours after it went down. However, their DHCP server was not working, so I forced my cable modem to its last logged IP address and I was back up. Too bad for the people who had to wait for the DHCP and DNS servers to come back up 2 full days later.
That is not acceptable.
Charter's financial problems are directly the result of a free market at work. I could have faster internet, but they pissed me off so badly that I'm satisfied with slower, stabler DSL service to have access to competent support. It's very refreshing to be able to speak with someone in 1st level support who knows what an IP address is. Maybe people in Mumbai are more competent than people in St. Louis.
Thank you.
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it took those clowns a month to install cable and internet when i moved into this apartment. after they finally got their act together, they promised me three months of discounted rates. upon receipt of the second bill, they had jacked up my rates and retroactively charged me for my first month's discount.
their bankruptcy serves them right for adding an extra 20$/month to my bill for adding the word "digital" to the name of my cable service.
For living in a smaller city (EAU CLAIRE, WI) and having charter as the only big speedy ISP around here, unless i fork money out for fiber, I'm not too dissatisfied with Charter. Really!
Low pings, no apparent throttling, and until i moved to the most densely populated area of town, I got 10mbps on my 10mbps line. True their techs are dumber than rocks - 99% of the time they fail, every time. I make them come out and tripple check everything before they leave, or I'm on the phone and driving 10 minutes to their office to fix it or kiss my ass goodbye.
Cant anyone give you a paper version of whats going on? I asked repeatedly for them to print out any changes "oh we cant do that" - what crap!
Their tv sucks, so hardcore, i cant even get into it. Lets put it this way - their DVR at their office locked up and crashed and wouldnt work again when they invited us to try it...
Good riddance. Charter was still born 10 years ago and has been circling the drain ever since.
We tried to get Charter in our apartment in Texas. We couldn't get more than a minute of uninterrupted video without pixalization and freezing. The first tech that come out said that they needed to rewire and we had to reschedule with the landlord's permission. We rescheduled and the second tech said that Charter wouldn't pay to rewire (even though it was Charter's property. This was the cable from the pole, over the roof, and into the attic.) and advised us to keep calling in for credits for the downtime. Charter refused downtime credit stating "Even if you can only watch one minute in ten you still have to pay for that one minute."
We ditched Charter and went with DirecTV. We scheduled a time for a tech to pick up the cablebox; in the eight hour window he didn't show. Rinse, repeat, two more times. We asked if we could just drop it off at a Charter office or mail it in, but that was too simple, they said that equipment could only be returned in person at an equip office that was 60 miles from us. We were not going to drive 120 miles round trip to return their equipment so we tossed it in the dumpster and Charter charged us $1000, $500 each for two cable boxes (we only ever had one????). We successfully disputed the charges and learned a very valuable lesson.
I have had Charter service for 9 years. My internet is always on, the prices are competitive if you call and ask for a deal, and they are friendly on the rare occasions when I call.