8-KSecurities & Listing

CHARTER COMMUNICATIONS, INC. /MO/ 8-K Report, Unregistered Securities Sale (Jul 8, 2005)

Filed July 8, 2005For Securities:CHTR

Summary

Charter Communications, Inc. (CHTR) filed an 8-K on July 8, 2005, to report on the settlement of significant shareholder class action and derivative lawsuits. The Federal District Court for the Eastern District of Missouri granted final approval of the settlement on June 30, 2005. Charter's Board of Directors subsequently accepted the settlement on July 6, 2005. This settlement involves Charter paying approximately $83 million, a portion of which is covered by insurance carriers. The company's contribution will be made through a combination of cash and equity. Specifically, Charter will issue 13.4 million shares of its Class A common stock, valued at approximately $15 million, and will pay approximately $68 million in cash. The issuance of these shares is being made under an exemption from registration pursuant to Section 3(a)(10) of the Securities Act of 1933, which applies when securities are issued in exchange for a settlement approved by a court.

Key Highlights

  • 1Charter Communications has settled significant shareholder class action and derivative lawsuits.
  • 2The settlement was given final court approval on June 30, 2005, by the Federal District Court for the Eastern District of Missouri.
  • 3Charter's Board of Directors accepted the settlement on July 6, 2005.
  • 4Charter's total contribution to the settlement is approximately $83 million.
  • 5The settlement payment will be funded by a combination of approximately $68 million in cash and 13.4 million shares of Charter Class A common stock.
  • 6The Class A common stock issued has a deemed value of approximately $15 million.
  • 7The issuance of Class A common stock is exempt from registration under Section 3(a)(10) of the Securities Act of 1933.

Frequently Asked Questions

This 8-K filing reports on Charter Communications, Inc.'s acceptance and planned payment of a settlement for shareholder class action and derivative lawsuits. It details the terms of the settlement, including the amount and form of consideration to be paid by the company.

Charter's total contribution to the settlement is approximately $83 million. This amount includes the $80 million settlement payment plus a $5 million payment to the insurance carrier, adjusted for discounts.

Charter's portion of the settlement will be paid using a combination of approximately $68 million in cash and the issuance of 13.4 million shares of its Class A common stock, which has a deemed value of approximately $15 million.

No, the issuance of the 13.4 million shares of Class A common stock is exempt from registration under Section 3(a)(10) of the Securities Act of 1933. This exemption applies to securities issued in exchange for a settlement that has received final court approval.