Charter lender agent says statement lacks details on 'obstacles' to debt reinstatement

By Caroline Salls

Pittsburgh, April 22 - Charter Communications, Inc. lender agent Wells Fargo Bank, NA objected to the company's proposed disclosure statement, arguing that the statement "fails to reveal a raft of obstacles" that stand in the way of a proposed reinstatement of $11.8 billion of senior debt, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

According to the objection, the proposed debt reinstatement is "the centerpiece (and lynchpin)" of the company's plan of reorganization.

However, Wells Fargo said Charter acknowledges that, if that debt cannot be reinstated, the company's annual interest expenses will increase by more than $500 million because the senior debt will need to be repriced to market levels.

As a result, the lender agent said the company conceded that the proposed plan will be unfeasible if the debt cannot be reinstated as planned.

"Because the disclosure statement does not adequately apprise creditors of the risks and obstacles presented by the reinstatement scheme that is so central to the plan, it should not be approved in its current form," Wells Fargo said in the objection.

Charter Communications is a St. Louis-based provider of video services, high-speed internet services and telephone services to residential and commercial customers on a subscription basis. The company filed for bankruptcy on March 27. Its Chapter 11 case number is 09-11435.

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