ITEM
1.03 BANKRUPTCY OR RECEIVERSHIP.
On
March 27, 2009, Charter Communications, Inc. (the “Company”), and certain of its
subsidiaries (collectively, the “Debtors”) filed voluntary petitions in the
United States Bankruptcy Court for the Southern District of New York (the
“Bankruptcy Court”) seeking relief under the provisions of Chapter 11 of Title
11 of the United States Code (the “Bankruptcy Code”). The Chapter 11 cases
are being jointly administered under the caption In re Charter Communications,
Inc., et al., Case No. 09-11435 (the “Chapter 11 Cases”). The Debtors will
continue to operate their businesses and manage their properties as debtors in
possession under the jurisdiction of the Bankruptcy Court and in accordance with
the applicable provisions of the Bankruptcy Code.
ITEM
2.04 TRIGGERING EVENTS THAT ACCELERATE OR INCREASE A DIRECT FINANCIAL OBLIGATION
OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT.
The
filing of the Chapter 11 Cases described in Item 1.03 above triggered the
acceleration of financial obligations under the terms of a number of debt
instruments of the Debtors (the “Debt Documents”). The Debtors
believe that any efforts to enforce the financial obligations under the Debt
Documents are stayed as a result of the filing of the Chapter 11 Cases in the
Bankruptcy Court. The Debt Documents and the approximate principal amount of
debt currently outstanding thereunder are as follows:
1. $3
million of 5.875% convertible senior notes due 2009 of the Company;
2. $479
million of 6.50% convertible senior notes due 2027 of the Company;
3. $53
million of 10.000% senior notes due 2009 of Charter Communications Holdings,
LLC;
4. $4
million of 10.750% senior notes due 2009 of Charter Communications Holdings,
LLC;
5. $25
million of 9.625% senior notes due 2009 of Charter Communications Holdings,
LLC;
6. $1
million of 10.250% senior notes due 2010 of Charter Communications Holdings,
LLC;
7. $1
million of 11.750% senior discount notes due 2010 of Charter Communications
Holdings, LLC;
8. $47
million of 11.125% senior notes due 2011 of Charter Communications Holdings,
LLC;
9. $60
million of 13.500% senior discount notes due 2011 of Charter Communications
Holdings, LLC;
10. $51
million of 9.920% senior discount notes due 2011 of Charter Communications
Holdings, LLC;
11. $69
million of 10.000% senior notes due 2011 of Charter Communications Holdings,
LLC;
12. $54
million of 11.750% senior discount notes due 2011 of Charter Communications
Holdings, LLC;
13. $75
million of 12.125% senior discount notes due 2012 of Charter Communications
Holdings, LLC;
14. $151
million of 11.125% senior notes due 2014 of CCH I Holdings, LLC;
15. $581
million of 13.500% senior discount notes due 2014 of CCH I Holdings,
LLC;
16. $471
million of 9.920% senior discount notes due 2014 of CCH I Holdings,
LLC;
17. $299
million of 10.000% senior notes due 2014 of CCH I Holdings, LLC;
18. $815
million of 11.750% senior discount notes due 2014 of CCH I Holdings,
LLC;
19. $217
million of 12.125% senior discount notes due 2015 of CCH I Holdings,
LLC;
20. $3.987
billion of 11.00% senior notes due 2015 of CCH I, LLC;
21. $1.860
billion of 10.250% senior notes due 2010 of CCH II, LLC;
22. $614
million of 10.250% senior notes due 2013 of CCH II, LLC;
23. $800
million of 8 3/4% senior notes due 2013 of CCO Holdings, LLC;
24. $1.1
billion of 8.000% senior second-lien notes due 2012 of Charter Communications
Operating, LLC;
25. $770
million of 8 3/8% senior second-lien notes due 2014 of Charter Communications
Operating, LLC;
26. $546
million of 10.875% senior second-lien notes due 2014 of Charter Communications
Operating, LLC;
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27.
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$8.2
billion of loans due 2014 under the Amended and Restated Credit Agreement,
dated as of March 6, 2007, among Charter Communications Operating, LLC,
CCO Holdings, LLC, the lenders from time to time parties thereto and
JPMorgan Chase Bank, N.A., as administrative agent; and
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28.
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$350
million of loans due 2014 under the Credit Agreement, dated as of March 6,
2007, among CCO Holdings, LLC, the lenders from time to time parties
thereto and Bank of America, N.A., as administrative
agent.
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ITEM
5.02
DEPARTURE OF
DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN
OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
On March
25, 2009, the Company appointed Gregory L. Doody as its Chief Restructuring
Officer and Senior Counsel in connection with the filing of the Chapter 11 Cases
until the earlier of (i) the date that the Employment Agreement (as defined
below) is terminated by either party and (ii) the effective date of the
Company’s Chapter 11 plan of reorganization. Mr. Doody, age 44,
served as Executive Vice President, General Counsel and Secretary of Calpine
Corporation from July 2006 through August 2008. Prior to joining
Calpine Corporation, Mr. Doody held various positions, including Executive Vice
President, General Counsel and Secretary at HealthSouth Corporation from July
2003.
Mr.
Doody’s services as Chief Restructuring Officer are provided to the Company
pursuant to an Employment Agreement, dated March 25, 2009 (the “Employment
Agreement”), between the Company and Mr. Doody, pursuant to which the Company
has retained Mr. Doody in connection with its Chapter 11
restructuring. Under the Employment Agreement, the Company agreed to
pay Mr. Doody a base salary at a monthly rate of not less than $60,000 (the
“Base Salary”) to evaluate and implement strategic and tactical options through
the process of restructuring the Company’s balance sheet, among other
duties. The Employment Agreement also provides for an emergence bonus
of $1,500,000 (the “Emergence Bonus”) reduced by (y) the sum of (i) the
aggregate amount of Base Salary paid to Mr. Doody during his term of employment,
(ii) the aggregate amount of “Monthly Fees” paid to Dumaine Advisors LLC
(“Dumaine”) pursuant to the Consulting Agreement dated January 16, 2009 by and
between the Company and Dumaine (the “Consulting Agreement”), and (iii) the
$75,000 retainer paid by the Company to Dumaine pursuant to the Consulting
Agreement (the “Retainer”). Notwithstanding the foregoing, the
Company’s Chief Executive Officer may, in his sole and absolute discretion,
reduce the Emergence Bonus to any amount, including zero dollars ($0.00), at any
point prior to the date of emergence from bankruptcy, provided that Mr. Doody is
not required to repay the Base Salary, and Dumaine is not required to repay any
Monthly Fees or the Retainer, previously received.
ITEM
7.01 REGULATION FD.
In connection with the Chapter 11
Cases, the Company has made information available on its website (
www.charter.com
under the “Investor and News Center”
tab), including its proposed plan of reorganization and disclosure statement
describing the terms of the plan of reorganization and other information
concerning the Company. A copy of a press release announcing the
filing of the voluntary petitions is attached hereto as
Exhibit 99.1.
ITEM
9.01 FINANCIAL STATEMENTS AND EXHIBITS.
The
following exhibits are filed with this report and incorporated by reference
herein:
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Exhibit No.
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Description
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99.1
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Press
release, dated March 27,
2009.
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