Charter Communications Files Chapter 11

As expected, cable operator Charter Communications (CHTR) today filed for protection from creditors under Chapter 11 of the federal bankruptcy code. The pre-packaged Chapter 11 plan will reduce the company’s debt by about $8 billion. Investor Paul Allen will remain an investor and retain the largest voting interest in Charter. The company said cash on hand and cash from operations will be adequate to fund te company and that it will not seek debtor-in-possession financing. The company expects to continue operate normally during the reorganization period.

Charter shares this morning are down a penny, or 16.3%, to 2.99 cents. As I have noted previously, the current common shareholders will be wiped out in the restructuring.