N.Y. Times: Sirius XM Preparing Chapter 11 Filing
February 10, 2009 at 2:43 PM (PT)
The NEW YORK TIMES is reporting that SIRIUS XM RADIO is working with its advisors to prepare Chapter 11 bankruptcy papers. The TIMES says that advisor JOSEPH A. BONDI of ALVAREZ AND MARSAL and attorney MARK THOMPSON of SIMPSON, THATCHER AND BARTLETT are working on the Chapter 11 filing, which the paper says "could come within days," according to a "person familiar with the matter."
A bankruptcy filing would raise questions about what CHARLIE ERGEN's ECHOSTAR, which has been buying up SIRIUS XM debt, might do in response. Reportedly, $300 million in debt, much of which is now held by the DISH NETWORK and SLING MEDIA owner, will mature next TUESDAY (2/17), and a filing could force ERGEN to make a formal purchase offer if he wants to avoid a bankruptcy court auction, or could force him to agree to take an ownership stake in the company at a price higher than he intended.
Sirius Made Yahoo's 'Might Not Survive 2009' List
Earlier TODAY, ALL ACCESS ran a story "SIRIUS Makes 'Might Not Survive 2009' List" and here is that infamous list from YAHOO FINANACE, listing its Top 15 Companies That Might Not Survive In 2009. With consumers shutting their wallets and corporate revenues plunging, the business landscape may start to resemble a graveyard in 2009. Household names like CIRCUIT CITY and LINENS 'N THINGS have already perished. And chances are those bankruptcies were just an early warning sign of a much broader epidemic.
MOODY's Investors Service, for instance, predicts that the default rate on corporate bonds -- which foretells bankruptcies -- will be three times higher in 2009 than in 2008, and 15 times higher than in 2007. That could equate to 25 significant bankruptcies per month.
YAHOO FINANCE examined ratings from MOODY's and data from other sources to develop a short list of potential victims that ought to be familiar to most consumers.
On the list is SIRIUS SATELLITE RADIO. YAHOO FINANCE writes, "The music rocks, but satellite radio has yet to be profitable, and huge contracts for performers like HOWARD STERN are looking unsustainable. SIRIUS is one of two satellite-radio services owned by parent company SIRIUS XM, which was formed when SIRIUS and XM merged last year. So far, the merger hasn't generated the savings needed to make the company profitable, and MOODY's thinks there's a "high likelihood" that SIRIUS will fail to repay or refinance its debt in 2009. One outcome could be a takeover, at distressed prices, by other firms active in the satellite business."