Satellite Radio In Sirius Trouble
Sirius XM Satellite Radio will declare bankruptcy unless a deal can be worked out with Echostar owner Charlie Ergen who has been buying up Sirius debt in an effort to take over the concern.
Sirius CEO Mel Karmazin has been circling the wagons with a team of lawyers and restructuring firm Alvarez & Marsal and is preparing to file for Chapter 11 protection before a $175 Million debt payment is due next Tuesday.
Filing for Chapter 11 protection would practically wipe out Karmazin’s personal stake in the satellite radio company, which recently saw him invest millions of his own money in the floundering company. However, handing over the company to Ergen and having to take a back seat to Sirius XM’s future is not a very stance attractive either.
Shareholders are most likely to vote for an Ergen infusion, since that would hopefully preserve their investment, at least in the short term…