ST. LOUIS (CN) – DirecTV makes false claims to Charter Communications customers to capitalize on Charter’s bankruptcy, Charter claims in Federal Court. Charter claims DirecTV launched a national advertising campaign with false statements that Charter is being liquidated and that its services will end or be substantially impaired.
One ad falsely states that there is no way Charter can continue to provide the latest technology or HD programming; another one depicts DirecTV as a life preserver and Charter as a sinking ship, according to the complaint.
Charter, based in St. Louis, is the nation’s third-largest publicly held cable provider. It operates in 27 states. Charter sought Chapter 11 relief recently after it recognized deteriorating market conditions in an effort to de-leverage its balance sheet, the suit states.
Charter’s bankruptcy plan provides for the canceling of $8 billion in debt, the raising of $3 billion of capital and debt financing, and continuation of its business, with trade creditors receiving payment in full. Charter says that due to the consensual nature of the agreement, the bankruptcy process will be brief and will have no impact on its customers. Despite this public knowledge, DirecTV launched the false ads, the suit states.
Charter seeks an undetermined amount of actual and punitive damages and wants the allegedly false ads enjoined. Charter is represented by Dean Franklin.