Charter Communications chtr, fourth-largest U.S. cable operator, said Friday that it filed for a prearranged bankruptcy reorganization.
Charter, based in St. Louis and controlled by Microsoft co-founder Paul Allen, had planned to file by April 1.
For years the company has ducked insolvency, but it is now coming up against tight credit and billions of dollars of debt coming due.
Charter had about $21.7 billion in debt at the end of 2008. Holders of $8 billion of the debt agreed to exchange it for almost full ownership in the new company, and some old debt was exchanged for new debt. After the bankruptcy, the company will have $13 billion mainly in bank debt, which expires from 2013 to 2016.
In a prearranged bankruptcy, a company enters into reorganization with a plan to emerge that has the approval of major stakeholders. The rest of the creditors will be dealt with in bankruptcy court.
Charter Chief Executive and President Neil Smit says the restructuring "is good news" for the company and its customers.
"We look forward to an expeditious restructuring, and once completed, we believe that Charter will be a stronger company," Smit said.
Charter said it filed motions requesting permission to keep employee wage and benefits programs running and to continue customer programs without interruption.
The company also named Gregory Doody as Chief Restructuring Officer. Doody has worked on restructurings for companies including Calpine and HealthSouth.
Kirkland & Ellis is Charter's legal counsel, Lazard is its financial adviser and AlixPartners is restructuring adviser.