Charter Files For Prearranged Bankruptcy

"That's the question," said Matt Dundon, an analyst at Miller Tabak Roberts. "It really depends on what your expectations are of the development of cash flow in the business."

Charter's troubles also make it more vulnerable to competition, which could target the cable operator's 5.5 million subscribers in 27 states.

Charter had about $21.7 billion in debt at the end of 2008. Holders of $8 billion of the debt agreed to exchange it for almost full ownership in the new company, and some old debt was exchanged for new debt. After the bankruptcy, the company will have $13 billion mainly in bank debt, which expires from 2013 to 2016.

Bondholders agreed to invest over $3 billion in the company, including up to $2 billion in equity, $1.2 billion in debt to be rolled over and $267 million in new debt.

In a statement, Charter Chief Executive and President Neil Smit said the restructuring "is good news" for the company and its customers.

"We look forward to an expeditious restructuring, and once completed, we believe that Charter will be a stronger company," Smit said.