Sirius XM Prepares Bankruptcy Filing

duckman18561 · #1 (**permalink**) 02-10-2009, 04:26 PM

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I just ran accross this on the New York Times web site.

Sirius XM Prepares Bankruptcy Filing

By ZACHERY KOUWE
Published: February 10, 2009
Sirius XM Satellite Radio has been working with advisers to prepare for a possible bankruptcy filing in a move that could put pressure on the satellite company EchoStar, which owns a substantial amount of the company’s debt.
Skip to next paragraph Related

Times Topics: Sirius XM Radio Inc.

Sirius has been working with the restructuring expert Joseph A. Bondi of Alvarez & Marsal and the bankruptcy lawyer Mark Thompson of Simpson, Thatcher & Bartlett to help prepare a Chapter 11 filing, people close to the company said. The documents and analysis are close to being completed and a filing could come within days, according to a person familiar with the matter.
Sirius, whose radio stars include the popular shock jock Howard Stern, has also been working with the investment bank Evercore Partners.
Charles Ergen, who controls a satellite-television empire including the Dish Network Corporation and EchoStar, recently acquired the majority of a $300 million tranche of Sirius debt that matures next Tuesday.
Since the news about the debt purchase has emerged, questions have surfaced over whether Mr. Ergen will make a bid to purchase Sirius. The threat of a possible bankruptcy filing could force Mr. Ergen to make a formal offer for the company now if he doesn’t want to go through an auction in bankruptcy court.
It could also compel Mr. Ergen to agree to convert his debt into an ownership stake in Sirius at a higher price than he originally considered.

stevenmlaf · #2 (**permalink**) 02-10-2009, 04:33 PM

Quote:

Originally Posted by duckman18561

I just ran accross this on the New York Times web site.

Sirius XM Prepares Bankruptcy Filing

By ZACHERY KOUWE
Published: February 10, 2009
Sirius XM Satellite Radio has been working with advisers to prepare for a possible bankruptcy filing in a move that could put pressure on the satellite company EchoStar, which owns a substantial amount of the company’s debt.
Skip to next paragraph Related

Times Topics: Sirius XM Radio Inc.

Sirius has been working with the restructuring expert Joseph A. Bondi of Alvarez & Marsal and the bankruptcy lawyer Mark Thompson of Simpson, Thatcher & Bartlett to help prepare a Chapter 11 filing, people close to the company said. The documents and analysis are close to being completed and a filing could come within days, according to a person familiar with the matter.
Sirius, whose radio stars include the popular shock jock Howard Stern, has also been working with the investment bank Evercore Partners.
Charles Ergen, who controls a satellite-television empire including the Dish Network Corporation and EchoStar, recently acquired the majority of a $300 million tranche of Sirius debt that matures next Tuesday.
Since the news about the debt purchase has emerged, questions have surfaced over whether Mr. Ergen will make a bid to purchase Sirius. The threat of a possible bankruptcy filing could force Mr. Ergen to make a formal offer for the company now if he doesn’t want to go through an auction in bankruptcy court.
It could also compel Mr. Ergen to agree to convert his debt into an ownership stake in Sirius at a higher price than he originally considered.

How will a bankruptcy filing affect lifetime subscriptions? Can they void/dishonor the lifetime subscription as part of the bankruptcy (assuming they continue to operate and/or change ownership)?

**LER** · #3 (**permalink**) 02-10-2009, 04:35 PM

My assumption is all things are possible. a BK filing can void some or all contracts, etc. I'd keep an eye on it. IANAL, however......

DJ Rob · #4 (**permalink**) 02-10-2009, 05:30 PM

It looks like Sirius is forcing Charlie's hand...should be an interesting few days ahead...

**Scott Greczkowski** · #5 (**permalink**) 02-10-2009, 06:24 PM

Yes indeed, if Sirius files for Bankruptcy now, all that debt Charlie purchased could be worthless. It appears that Sirius XM is trying to fend off Charlie.

Not sure who to root for here.

satjay · #6 (**permalink**) 02-10-2009, 06:29 PM

Quote:

Originally Posted by stevenmlaf

How will a bankruptcy filing affect lifetime subscriptions? Can they void/dishonor the lifetime subscription as part of the bankruptcy (assuming they continue to operate and/or change ownership)?

Humm..I recently called to see if they had any one year promotions, as I have not recived any mail regarding promtions and I used to get them all the times. They did not have any one year promtions but sure were pushing the lifetime. I wonder if this had anything to do with it??

bigthrust · #7 (**permalink**) 02-10-2009, 06:43 PM

They should have at least tried an advertising model like network TV. They also WAY overpaid Howard Stern and others. Another saga of poor business management.

rad · #8 (**permalink**) 02-10-2009, 06:51 PM

Quote:

Originally Posted by bigthrust

They should have at least tried an advertising model like network TV. They also WAY overpaid Howard Stern and others. Another saga of poor business management.

The reason I went with Sirius was to get away from commercials and all the yacking that was on our stations. I do agree that they spent WAY too much money on Stern, it did bring some customers over but not enough to cover his contract.

apollog · #9 (**permalink**) 02-10-2009, 06:56 PM

That's what happens when you are greedy and raise prices when things are going bad. Charging for internet listening when it was FREE before, COME ON NOW!!!!! You get what you deserve Sirius.

DJ Rob · #10 (**permalink**) 02-10-2009, 07:07 PM

Quote:

Originally Posted by apollog

That's what happens when you are greedy and raise prices when things are going bad. Charging for internet listening when it was FREE before, COME ON NOW!!!!! You get what you deserve Sirius.

They weren't being greedy. They were trying to make enough to be able to pay the notes due this month so they could stay in business...