Failure to find buyer preceded Charter bankruptcy
Charter Communications tried to sell itself several times in the 18 months before it filed for bankruptcy, but failed apparently because there were no buyers willing to take on the company’s debt load while capital markets were drying up.
The news emerged during the second day of Charter’s Chapter 11 bankruptcy proceedings.
Jim Millstein, a former financial advisor to Charter and now the senior restructuring officer at the U.S. Treasury, testified that Charter had tried to sell as early as the summer of 2007. According to a report from Reuters, Millstein said he was not privy to the details of the talks but believed they were frustrated by the beginnings of the credit freeze.
Charter filed for bankruptcy protection in March. The company has a reorganization plan in hand, but that plan is facing opposition, primarily from its lending banks.
The banks, including JPMorgan and Wells Fargo, are of the opinion that the reorganization plan amounts to takeover of the company by its bondholders. Millstein testified that he believed the reorganization plan did not involve a change of control under the terms of the debt covenants, according to Reuters.