Sirius XM Considering Filing for Bankruptcy 
Home Theater News XM-Satellite Radio News
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Wednesday, 11 February 2009

Sirius XM has engaged in what some call a calculated move by considering filing bankruptcy under Chapter 11.  The New York Times suggests that this might be a bid to get Charles Ergen, the owner of Dish Network and EchoStar, to convert the Sirius debt that he recently bought into an ownership stake in the company.

Whether this is a calculated move or not, Sirius is about $3.25 billion in debt , and must pay $125 million by the end of this month – a figure which appears to be out of the scope of capital that the company can scrape together. The bankruptcy will likely not interrupt service to consumers, but it may cause Howard Stern and Martha Stewart to be taken off the air in order to eliminate two of the highest-paid talents that the company employs.

If the bankruptcy occurs, Sirius will become the second largest company, in terms of assets, to go under.  With $5 billion in assets, Sirius is behind the Smurfit-Stone ($7 billion in assets) bankruptcy earlier this year.

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