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Filed under: Microsoft (MSFT), Private equity

Back in the mid 1970s, Paul Allen cofounded Microsoft (NASDAQ: MSFT). Since then, he has bought many nice toys (such as luxury yachts and sports teams), as well as made investments in a variety of companies. Unfortunately, his investment record has been spotty (perhaps he should have focused on the toys instead?)

Now, it looks like Allen will take the biggest loss of his investment career; that is, in Charter Communications (NASDAQ: CHTR). In all, he has committed $7 billion to the firm.

With the housing market crash and the rise of free video on the Web from sites like Hulu, you'd think that the pay TV industry might have felt a pinch last year. Not the case.

At the end of 2008, almost 80 million U.S. households paid for TV service from a top cable, phone, or satellite provider. That's about 1.5 million more households than paid for TV at the end of 2007, or about 2% growth.

Will the industry grow again in 2009? Or will it lose customers this year?

If you're a Charter cable customer who received the following email from the company about what happened last week, you could be forgiven for being confused about what happened. 

What happened is that the company went bust.

Charter Communications (CHTR), one of the largest U.S. cable companies, will file for bankruptcy protection by April 1, as part of a resturcuting to cut its debt by $8 billion, the WSJ reports. Microsoft (MSFT) co-founder Paul Allen will still have the largest voting interest in the company.

Meanwhile, growth stalled in Q4.

WSJ: The company said it lost 75,100 net basic video customers, more than it lost in the prior-year's fourth quarter. It gained 63% fewer digital video customers, 55% fewer high-speed Internet customers and 52% fewer telephone customers than a year earlier.

Charter Communications (CHTR) will file for protection from creditors under Chapter 11 of the federal bankruptcy code by April 1 as part of a debt restructuring plan, the cable company announced. Under terms of the deal, current Charter common shares will be worthless.