SIRIUS XM PREPARES BANKRUPTCY...At least a threat for Charlie

by Bob Hamilton on 02/10/2009, 05:18 PM

Tags: xm , sirius , dish network

Chapter 11 Expected to Be Filed Within Days

Let the games begin.  Consider this interpretation of the fun happening in New York today....

Sirius XM satellite radio which is saddled with an enormous debt, at the same time their subscribing base keeps growing, is keeping an eye on Charles Ergen.  Ergen owns Dish Network and other communications companies and he has recently acquired $300 million in Sirius debt. That debt reportedly comes due next week, and it's then the current Sirius execs expect that Ergen will then try to take over the a reduced price, of course.

Not so fast.....

So, Sirius XM is now working with lawyers and other advisers to prepare for a possible Chapter 11 bankruptcy filing.  If they do that before the Ergen debt is called in, the Disk Network boss will just line up with the rest of the creditors...good luck on when you get paid. 

Today, Sirius XM made it public that they're getting ready for chapter 11.   This may force Ergen to come in with an offer to buy Sirius XM before they get serious (pardon the pun) about the bankruptcy.  This would mean that the price of taking over Sirius before the bankruptcy would be much higher.

For a complete report on what is "officially" going on, check out Zachery Kouwe's
story in the New York Times...