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Report: Sirius XM Preparing for Bankruptcy
Reports say this could be a posturing move to pressure Charles Ergen, owner of Dish Network and EchoStar, into making an offer to acquire the financially troubled radio service.
Sirius XM Satellite Radio has hired advisers and is preparing to possibly file for Chapter 11 bankruptcy in the coming days, The New York Times is reporting.
The New York Times says this may be a calculated move to pressure Charles Ergen, owner of Dish Network and EchoStar who recently bought up most of Sirius' debt, into making an offer to acquire the company.
According to The Wall Street Journal, Ergen made an "unsolicited offer late last year to take control of Sirius XM Radio Inc., and was rebuffed." Ergen could also convert his debt into an ownership stake instead of payment, reports say.
Service is unlikely to be interrupted if a bankruptcy filing takes place, according to The New York Times. However, Sirius XM may have to terminate contracts with Howard Stern and Martha Stewart, two of its higher-priced talents. The bankruptcy is unlikely to have any ramifications for integrators who acted as resellers of satellite radio service or for those who installed satellite radio tuners.
Sirius XM has about $3.25 billion in debt, $175 million of which is owed at the end of February and is unlikely to be paid, according to The New York Times.
Sirius XM, which has more than $5 billion in assets, would be the second-largest bankruptcy filing this year, according to Capital IQ. Smurfit-Stone has been the largest Chapter 11 filing this year with more than $7 billion in assets.
Sirius XM hired Joseph A. Bondi of Alvarez & Marsal and Mark J. Thompson, a bankruptcy lawyer with Simpson, Thacher & Bartlett, to help prepare a Chapter 11 filing, according to The New York Times.
The New York Times says this may be a calculated move to pressure Charles Ergen, owner of Dish Network and EchoStar who recently bought up most of Sirius' debt, into making an offer to acquire the company.
According to The Wall Street Journal, Ergen made an "unsolicited offer late last year to take control of Sirius XM Radio Inc., and was rebuffed." Ergen could also convert his debt into an ownership stake instead of payment, reports say.
Service is unlikely to be interrupted if a bankruptcy filing takes place, according to The New York Times. However, Sirius XM may have to terminate contracts with Howard Stern and Martha Stewart, two of its higher-priced talents. The bankruptcy is unlikely to have any ramifications for integrators who acted as resellers of satellite radio service or for those who installed satellite radio tuners.
Sirius XM has about $3.25 billion in debt, $175 million of which is owed at the end of February and is unlikely to be paid, according to The New York Times.
Sirius XM, which has more than $5 billion in assets, would be the second-largest bankruptcy filing this year, according to Capital IQ. Smurfit-Stone has been the largest Chapter 11 filing this year with more than $7 billion in assets.
Sirius XM hired Joseph A. Bondi of Alvarez & Marsal and Mark J. Thompson, a bankruptcy lawyer with Simpson, Thacher & Bartlett, to help prepare a Chapter 11 filing, according to The New York Times.
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About the Author
Steve Crowe, Web Editor
Steve is an editor for cepro.com. He graduated from Emerson College with a B.A. in Journalism. He joined the CE Pro staff in 2008. Steve is also a freelance sports writer for The Boston Globe and other various publications.
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