Bloomberg.com: Worldwide
By James Callan
Feb. 16 (Bloomberg) -- A group of Sirius XM Radio Inc. creditors will seek the removal of Chief Executive Officer Mel Karmazin if the company files for bankruptcy instead of making a deal to remain solvent.
“Creditors believe that a precipitous bankruptcy filing will not be in their best interests,” said Edward Weisfelner, a lawyer with Brown Rudnick LLP who’s representing the creditors. “Our group is concerned that management not use the threat of bankruptcy as a negotiating tool,” he said in a telephone interview today.
Sirius XM said last week it may be forced to file for bankruptcy as soon as Feb. 17 if it can’t reach an agreement to refinance debt. Tomorrow, the New York-based company must repay $175 million in bonds held by Charles Ergen’s EchoStar Corp. Karmazin is also in talks with John Malone’s Liberty Media Corp. about a possible transaction, people with knowledge of the matter said. A deal with Ergen or Malone could prevent a bankruptcy.
“The management of Sirius XM is continually working to ensure the best possible outcome for the enterprise,” Sirius XM said today in an e-mailed statement.
If Sirius XM files for bankruptcy, the creditors will seek the appointment of a trustee or an overseer to replace Karmazin and senior management, Weisfelner said.
The company exchanged about $172.5 million of its convertible bonds due December 2009 for senior notes maturing in June 2011, it said in a statement last week. The amount is almost half of the $400 million in notes Sirius XM had maturing at yearend.
The New York Post reported last week that Malone had offered Sirius XM a bridge loan of several hundred million dollars to pay debt maturing next week, citing a person close to the situation.
The shares rose 3 cents to 10 cents on Feb. 13 in Nasdaq Stock Market trading. The stock has plunged 94 percent since Karmazin, 65, completed the merger of Sirius and XM in July. Sirius XM has about $3.25 billion in total debt.
The Wall Street Journal reported on the creditors’ plan earlier today.
By James Callan
Feb. 16 (Bloomberg) -- A group of Sirius XM Radio Inc. creditors will seek the removal of Chief Executive Officer Mel Karmazin if the company files for bankruptcy instead of making a deal to remain solvent.
“Creditors believe that a precipitous bankruptcy filing will not be in their best interests,” said Edward Weisfelner, a lawyer with Brown Rudnick LLP who’s representing the creditors. “Our group is concerned that management not use the threat of bankruptcy as a negotiating tool,” he said in a telephone interview today.
Sirius XM said last week it may be forced to file for bankruptcy as soon as Feb. 17 if it can’t reach an agreement to refinance debt. Tomorrow, the New York-based company must repay $175 million in bonds held by Charles Ergen’s EchoStar Corp. Karmazin is also in talks with John Malone’s Liberty Media Corp. about a possible transaction, people with knowledge of the matter said. A deal with Ergen or Malone could prevent a bankruptcy.
“The management of Sirius XM is continually working to ensure the best possible outcome for the enterprise,” Sirius XM said today in an e-mailed statement.
If Sirius XM files for bankruptcy, the creditors will seek the appointment of a trustee or an overseer to replace Karmazin and senior management, Weisfelner said.
The company exchanged about $172.5 million of its convertible bonds due December 2009 for senior notes maturing in June 2011, it said in a statement last week. The amount is almost half of the $400 million in notes Sirius XM had maturing at yearend.
The New York Post reported last week that Malone had offered Sirius XM a bridge loan of several hundred million dollars to pay debt maturing next week, citing a person close to the situation.
The shares rose 3 cents to 10 cents on Feb. 13 in Nasdaq Stock Market trading. The stock has plunged 94 percent since Karmazin, 65, completed the merger of Sirius and XM in July. Sirius XM has about $3.25 billion in total debt.
The Wall Street Journal reported on the creditors’ plan earlier today.
