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Charter Moves Step Closer to Settling Shareholder Lawsuits

Aug 6, 2004  •  Post A Comment

Charter Communications late Thursday said it moved one step closer to settling 18 class-action lawsuits filed against the company in connection with an accounting scandal that was exposed three years ago. Charter agreed in principle to pay Charter shareholders $144 million in cash and stock as part of closing the case.

The class-action settlement comes a little more than a week after the St. Louis-based cable operator settled a civil suit filed by the Securities and Exchange Commission over the same scandal, which centered on how Charter counted subscribers. Four former executives were indicted in connection with the scheme.

The agreement reached Thursday is the first in a series of steps between the plaintiffs and Charter to settle the lawsuits. These other steps must be completed: obtain federal court approval of the settlement, notify Charter shareholders of record from November 1999 to August 2002 of the proposed settlement, handling objections to the settlement and final court approval of the settlement.

The settlement won’t involve any cash directly from Charter. Instead, Charter’s insurance carriers will contribute $64 million cash, while the balance will involve $40 million in class A common stock and another $40 million in 10-year warrants to purchase class A common stock at a later date.