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Tuesday, February 10, 2009

Report: Sirius XM Braces for Chapter 11

FOXBusiness

Under pressure from satellite television company EchoStar (SATS), Sirius XM Satellite Radio (SIRI) is preparing for a possible bankruptcy filing, according to a published report.

The recently merged Sirius XM has been working with restructuring expert Joseph A. Bondi of Alvarez & Marsal and bankruptcy lawyer Mark Thompson of Simpson, Thatcher & Bartlett to ready a Chapter 11 restructuring filing, sources told The New York Times. A filing could come within days as the documents and an analysis are close to being completed, the newspaper reported.

The move comes weeks after Charles Ergen's EchoStar acquired the majority of a $300 million tranche of Sirius debt that matures next Tuesday as part of a possible takeover bid. Ergen also controls the DISH Network (DISH).

The looming bankruptcy filing could be used as a bargaining chip by Sirius in an effort to get Ergen to either make a formal takeover offer or convert his debt into an ownership stake at a higher price, the newspaper reported.

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