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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 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
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!
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 $8B in debt forgiveness for that new share.
Is it just my observation, or are there way too many stupid people in the world?
It's no surprise that Charter filed, Paul Allen loaded the company with way too much debt during his poorly thought out cable acquisition spree in the early part of this decade. Just look at their footprint, there is no geographic rhyme or reason to it. That has hamstrung the company's operations (any free cash has to go to debt service, instead of investing in cable infrastructure). As a result, Charter is way behind upgrading its network, as any customer of theirs knows. It's no problem for a monopoly, but now Charter is facing severe competition from the telcos and of course satellite. Same thing happened to Adelphia, which eventually was consumed by TW and Comcast. But now the cable cos face a potentially bigger threat - disintermediation due to Internet/AppleTV/Boxee/Hulu etc.
RTFA, Charter has no where near 27 million subscribers, try 5.5 million.
Unfortunately, as the auto industry found out, you need to have Obama's friends working in your industry in order to qualify.
Mod me down, my New Earth Global Warmingist friends!
M$!
Mod me down, my New Earth Global Warmingist friends!
If by "Obama's friends" you mean the millions of auto workers and people who manufacture auto parts, you are absolutely correct.
You are welcome on my lawn.
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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Ummm... you really need a fact check on Asian auto manufacturers. Cultural considerations aside, the concept of a union is laughable there.
512 MB RAM, 20 GB disk, 200 GB transfer, five datacenters. $19.95/month.
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
Wow. I do some occasional contract work for a cable tv/internet/phone company; I'm not even a regular employee or "office", but more of a fix-it guy and I recently became a sales drone (I can sign people up for the service). All along, if someone wanted to cancel their service all they have to do is drop off their equipment with me (modem, digital cable box, whatever) and I send an email to the company to tell them that I've got it. End of story. No hassle for the customer at all.
If you're a zombie and you know it, bite your friend!
Because they were never needed there, the asian manufacturers neither treated employees like slaves nor discarded workers as worthless cogs at the first sign of trouble.
There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.