Charter 2009 Annual Report Download - page 20

17
outstanding following consummation of the Plan); (v) R2 Investments, LDC (“R2 Investments”) (an equity interest
holder in Charter); and (vi) certain plaintiffs representing a putative class in a securities action against three Charter
officers or directors filed in the United States District Court for the Eastern District of Arkansas (Iron Workers Local
No. 25 Pension Fund, Indiana Laborers Pension Fund, and Iron Workers District Council of Western New York and
Vicinity Pension Fund, in the action styled Iron Workers Local No. 25 Pension Fund v. Allen, et al., Case No. 4:09-
cv-00405-JLH (E.D. Ark.).
Charter Operating is in the process of amending its senior secured credit facilities which it expects to close by March
31, 2010 and upon the closing of these amendments, each of Bank of America, N.A. and JPMorgan, for itself and on
behalf of the lenders under the Charter Operating senior secured credit facilities, has agreed to dismiss the pending
appeal of our Confirmation Order pending before the District Court for the Southern District of New York and to
waive any objections to our Confirmation Order issued by the United States Bankruptcy Court for the Southern
District of New York. On December 3, 2009, Wilmington Trust withdrew its notice of appeal. On March 26, 2010,
we were informed by counsel for Wells Fargo that Wells Fargo intends to dismiss its appeal on behalf of the lenders
under the CCO Holdings credit facility. Law Debenture Trust and R2 Investments have filed their appeal briefs.
The schedule for the securities plaintiffs to file their appeal briefs has not yet been established. We cannot predict
the ultimate outcome of the appeals.
Other Proceedings
In March 2009, Gerald Paul Bodet, Jr. filed a putative class action against Charter and Charter Holdco (Gerald Paul
Bodet, Jr. v. Charter Communications, Inc. and Charter Communications Holding Company, LLC) in the U.S.
District Court for the Eastern District of Louisiana. In January 2010, plaintiff filed a Second Amended Complaint
which also named Charter Communications, LLC as a defendant. In the Second Amended Complaint, plaintiff
alleges that the defendants violated the Sherman Act, the Communications Act of 1934, and the Louisiana Unfair
Trade Practices Act by forcing subscribers to rent a set top box in order to subscribe to cable video services which
are not available to subscribers by simply plugging a cable into a cable-ready television. Defendants’ response to
the Second Amended Complaint is currently due on April 2, 2010. In June 2009, Derrick Lebryk and Nichols
Gladson filed a putative class action against Charter, Charter Communications Holding Company, LLC, CCHC,
LLC and Charter Communications Holding, LLC (Derrick Lebryk and Nicholas Gladson v. Charter
Communications, Inc., Charter Communications Holding Company, LLC, CCHC, LLC and Charter
Communications Holding, LLC) in the U.S. District Court for the Southern District of Illinois. The plaintiffs allege
that the defendants violated the Sherman Act based on similar allegations as those alleged in Bodet v. Charter, et al.
We understand similar claims have been made against other MSOs. The Charter defendants deny any liability and
plan to vigorously contest these cases.
We are also aware of three suits filed by holders of securities issued by us or our subsidiaries. Key Colony Fund,
LP. v. Charter Communications, Inc. and Paul W. Allen (sic), was filed in February 2009 in the Circuit Court of
Pulaski County, Arkansas and asserts violations of the Arkansas Deceptive Trade Practices Act and fraud claims.
Key Colony alleges that it purchased certain senior notes based on representations of Charter and agents and
representatives of Paul Allen as part of a scheme to defraud certain Charter noteholders. Clifford James Smith v.
Charter Communications, Inc. and Paul Allen, was filed in May 2009 in the United States District Court for the
Central District of California. Mr. Smith alleges that he purchased Charter common stock based on statements by
Charter and Mr. Allen and that Charter’ s bankruptcy filing was not necessary. The defendants’ response to the
Complaint was given in February 2010. Herb Lair, Iron Workers Local No. 25 Pension Fund et al. v. Neil Smit,
Eloise Schmitz, and Paul G. Allen (“Iron Workers Local No. 25”), was filed in the United States District Court for
the Eastern District of Arkansas on June 1, 2009. Mr. Smit was the Chief Executive Officer and Ms. Schmitz is the
Chief Financial Officer of Charter. The plaintiffs, who seek to represent a class of plaintiffs who acquired Charter
stock between October 23, 2006 and February 12, 2009, allege that they and others similarly situated were misled by
statements by Ms. Schmitz, Mr. Smit, Mr. Allen and/or in Charter SEC filings. The plaintiffs assert violations of the
Securities Exchange Act of 1934. In February 2010, the United States Bankruptcy Court for the Southern District of
New York held that these plaintiffs’ causes of action were released by the Third Party Release and Injunction under
Charter’ s Plan of Reorganization. Charter denies the allegations made by the plaintiffs in these matters, believes all
of the claims asserted in these cases were released through the Plan and intends to seek dismissal of these cases and
otherwise vigorously contest these cases.
We and our parent companies also are party to other lawsuits and claims that arise in the ordinary course of
conducting our business. The ultimate outcome of these other legal matters pending against us or our parent
companies cannot be predicted, and although such lawsuits and claims are not expected individually to have a
material adverse effect on our consolidated financial condition, results of operations, or liquidity, such lawsuits