Charter Files For "Prearranged Bankruptcy" 82
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."
Could it be their service? (Score:5, Interesting)
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
Oops, wrong number (Score:4, Interesting)
They only have 5.5M customers. So $2363 of debt per customer. How long will it be to pay THAT off?
Liquidate the entire damned company! (Score:5, Interesting)
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!
Paul Allen + too much leverage = BK (Score:1, Interesting)
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.
Re:Its good to be the king (Score:4, Interesting)
This is actually how the stock market is designed to work. As a shareholder, you are banking on a company's future success, in order to get a return on that investment.
The unfortunate reality is that the way the market actually works, dividends paid out by holding onto shares are very small compared to the money being made by buying and selling at the best times for each. Like any other monetary investment, it helps to fully understand how the stock market works in day to day use, before diving in. I do not get involved in the stock market because of my lack of full understanding of it. I do see and understand that if you put money into most companies on the market, you should expect to cash in those stocks and switch them out at intervals. The result of bad timing is what happened to some of these Charter stock holders.
I really feel that the stock markets give too much importance to showing profits at any cost. companies lie, and do things to get short term profits to keep their stock price supported. I often muse over whether a CEO is running a company or a stock value.
While I am offtopic, i'll also throw in there that the media seems to rely upon the stock market for how the economy is doing. Oddly enough, the stock market is also affected by what the media's perception of current economic climate. This causes some amusing results, as a sudden spike in either feeds the other. While these spikes are limited overall, it still makes for some good entertainment while I wait to get any kind of employment.
Re:Could it be their service? (Score:3, Interesting)
As an employee of Charter Communications I resent your stance that you're glad anyone is in financial hardship. I can attest through my own observations and experiences that there is flaws in the customer service side. Since Charter outsourced their customer service department to "Convergsys" and "Teletch" based in locations such as the Phillipeans, the customer service quality has plummeted. The outsourcing companies undertrain their employees and the reps are not armed with much knowledge to properly resolve customer issues.
I do believe the backbone is strong however. As with many large companies, there are going to be complaints of problems and inefficieancies. However, as someone with direct communications with customers, the very large majority are happy with their service, especially with the internet side of things.
Another poster made the comment on how horrible the moxi dvr's are, and how many customers are frusterated. However, there has been a non-stop demand for these boxes and in some areas its hard to keep them in stock. These are by far our most requested DVR, far over the motorola dvr's. For equipment that is being "beta tested" there sure is a lot of happy customers with them.
Re:Could it be their service? (Score:3, Interesting)
As I post this, I upload a file to my friends ftp server all the way to California from Europe with my max upload speed, there is no "optimisation" or anything on both boxes either. One system is OS X Leopard and other is NetBSD.
I can't say anything bad about a service like that as distance really matters between residential connections, especially when they have to pass 30-35 hops. If I moved to California, my service would really be charter.
I can't understand what kind of "phone support" people get from a cable ISP either. Generally 192.168.*.* from local connection (the DOCSIS modem itself) would give lot more than ISP can get over there, especially with lousy connections.
The only "customer service" you would need is because of the idiot DOCSIS guys. It is almost nightmare, hack of deepest hacks to get firmware updates as the standard had "set top TV box" as scheme of doing things. You must know the deal and that is the time when you call customer service. It took a month of frustration with my local ISP and I ended up buying a DSL modem instead of trying to update my Motorola DOCSIS modem. Otherwise, my local ISP was giving what I need too, they had the bandwidth they promised. I guess the frustration comes from the DOCSIS standard and how locked it is even when you need to do "white hat" things like firmware updates.
The standard itself forces you to get phone support service for trivial tasks. I can't imagine convincing a Philippine guy to force update firmware of a Motorola SB5100 for instance.