Charter Communications, headed by Microsoft co-founder Paul Allen has filed for Chapter 11 bankruptcy protection. Charter says it is the nation's fourth largest cable company and that it will be shedding $8 billion in debt by restructuring. The company originally announced it was seeking Chapter 11 protection on February 12 and today announced details of its plans. It will continue operations as it restructures.
Allen, who is also owner of the Seattle Seahawks and Portland Trailblazers, holds about 35% of the shares of Charter, according to the company's latest annual report (10-K) filing with the SEC. He is the chairman of the board and he will continue to be the company's largest stakeholder.
In accordance with the greedy trend of the times, it seems that one of his company's first orders of business, was to ensure that Charter's top execs were adequately set up in their golden parachutes and post-bankruptcy bonuses. According to an SEC filing on March 12, 2009, they will qualify for giant hunks of cash if the company reemerges from bankruptcy, and potentially, even if it doesn't, or they are terminated. The bonuses are: CEO Neil Smit - $6 million; COO Michael Lovett - $2.38 million; CFO Eloise Schmitz - $765,000; and don't forget the lawyer, general counsel Grier Raclin - $765,000.
Here is the precise wording regarding these bonuses:
"The [Restructuring Value Program (the “RVP”)] provides incentives to encourage and reward participants for a successful restructuring of the Company. Participants who continue to be employed by the Company or its subsidiaries until payment of RVP awards earn payments under the RVP upon either (i) the Company’s emergence from its Chapter 11 restructuring proceeding (the “Proceeding”) or (ii), if the Company’s restructuring plan is the Joint Plan (as defined in the Plan), when the Commitment Fees under the Joint Plan are first payable. Participants also earn their RVP payments upon an earlier of (i) their termination of employment due to death or disability, or their termination on or after the Company’s emergence from the Proceeding by the Company for a reason other than “cause,” or voluntarily due to a “good reason” (as each such term is defined in the Plan) or (ii) a “change in control” of the Company if they are then employed by the Company or its subsidiaries. The target RVP awards for the Company’s named executive officers as of the date hereof (which are subject to change in accordance with the terms of the Plan) are: N. Smit - $6 million; M. Lovett - $2.38 million; E. Schmitz - $765,000; and G. Raclin - $765,000.
But wait, there's more! These executives may qualify for yet another set of bonuses which are labeled as the Cash Incentive Program. Here are the amounts: Smit - $2.5 million; Lovett - $910,000; Schmitz - $664,000; and Raclin - $597,000.
The best job in America these days has to be executive of a large publicly traded company. Doesn't matter how you perform, the cash just keeps a-flowin'.
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Charter Cable
I am sure that Comcast will buy them up.
Charter Communications - Bankrupt?
How can this be happening? They've been jacking up their cable customer's bills for the past few years. What happen to all of the money? Oh, I know ... It went to bonuses for non-performing Exec's. When will ComCast do the take-over of their cable franchises. Very soon I hope.
Charter bankrupt but still pays bonuses to execs
The fleecing of America continues by the executive class.
That's ok.
As soon as the Mexican drug cartels start killing American law enforcement agents and vast numbers of American citizens IN THE UNITED STATES there's going to be a CIVIL WAR right here...........ssssoooooooooooooooo.........................
All of those exec's who are getting these bonuses right now for letting their companies and this country fall to pieces are just gonna have to give it all back when the impending doom starts.
Paul Allen has abused Charter Cable for his own profit
Charter has been Allen's tax deduction for years. This company has been so poorly managed for too long. Hopefully there are lawyers lining up to pierce the corporate veil and strip Allen of some of his bucks. Mr. Allen, controlling shareholder of Charter, is a criminal.
They Deserve the Pay
But they deserve the bonuses! These people successfully extended their business by borrowing money they won't have to repay. They took a mid-sized company and made it big with "free money". Sure, they borrowed it then, but now we restructure, lose 8 Billion in debt, and slough the under performing parts of the business. Now we have a company, no debt, and only using the best parts of the other companies we bought with free money! Genius! Awesome! Bigger bonus! Generate More free monies!
This seems to be the New American Way. If only the "Kinda Top Three" can do the same! AIG is there as well! 170 Billion and counting in Free Money to pay for their previous Mergers.
Why pay for your company's gowth costs if you can get a bailout or restructuring! Genius I say! More bonuses all round!
Charter Is A Joke
I was an extremely pleased customer of Dish Network's until I moved into a new apartment complex that did not allow satellite TV. I am disgusted with Charter and the quality of their services. If Comcast takes them over, I'll be jumping for joy.
http://the-digital-review.blogspot.com
Oh Charter...
Wow, so this is how my $120 a month is being spent? Well, hope they don't mind the next payments being in late....
Hate charter
I have been a customer for 8+ years to the tune of first $100/month-now $200/month. Their service is HORRIBLE but they are the only cable company in my area so if comcast gets them, I will do a back flip. The exec bonuses are a joke. If a poor person wanted to be handed a lump sum of money for doing nothing, or worse, doing a really poor job that caused others to lose everything they worked for, people would make snarky remarks about hand outs and welfare cases. How is this different? I, for one, am glad that all of these execs are being exposed for the stupid self centered bastards that many of them are. The emperor has no clothes-I mean like buck a$$ naked.
Charter = Monopoly
There is no free trade when it comes to cable companies. I know, they put up the infrastructure so they should get the customers, but for how long? I was a Greater Media/Charter customer for almost 30 years. They treat you like crap, their service is lousy, and the have the gall to call you and ask if you want movie channels, etc. One of their sales people called me all excited about how he was going to save me money! I asked, are you lowering your rates? He said no, but if I bundle my TV, phone and internet I could save money. I told him I'd do better than that. Cancel my service then I'll save a ton. I finally went to Dish Network, and couldn't be happier. I hope Comcast buys them in a hostile takeover. Allen is an a**.
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