By David B. Wilkerson
CHICAGO (Dow Jones) -- Charter Communications has filed for
Chapter 11 bankruptcy protection, following through on the
intentions it announced in February, under the terms of an
agreement with some of its creditors, the operator of
cable-television systems said Friday.
St. Louis-based Charter (CHTR), controlled by Microsoft
co-founder Paul Allen, has said it plans to continue operations as
usual.
As it said last month, the company has agreed to implement a
financial restructuring that will reduce its debt by about $8
billion. Charter, one of the largest U.S. cable operators with 5.5
million customers, carries a crushing long-term debt load of more
than $20 billion.
Also Friday, Charter said that cash on hand and cash from its
operating activities will be sufficient during the restructuring so
that it won't have to seek debtor-in-possession financing, which
tends to carry much higher interest rates and fees in the current
credit environment.
The company has also filed a series of customary motions that
will allow it to continue to offer employee wages and benefits,
honor current customer programs without interruption, and pay
certain balances and fees to local franchise authorities in areas
where it maintains cable systems.
Earlier this decade, Charter got hurt more extensively than its
cable competitors by satellite broadcasters. The company had many
systems that were late in adopting state-of-the art two-way
capability, and the satellite companies targeted Charter systems in
those areas.
It also had a poor customer service reputation that it has had
to work hard to overcome.