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05/13/2009

DirecTV told to modify Charter bankruptcy ads

By: The Associated Press, Business Week

A judge has ordered DirecTV Group Inc. to temporarily stop running its current ads that highlight rival Charter Communications Inc.'s bankruptcy filing unless the ads are modified.

U.S. District Judge Rodney W. Sippel in St. Louis, where Charter has its headquarters, made the ruling Wednesday, two days after Charter sued DirecTV for running what it deemed as "false and misleading" ads.

The ads claim that Charter can't provide the latest technology, add high-definition channels or offer new exclusive programming given its Chapter 11 filing in March. But Charter said it can keep up with competition and expects to emerge from bankruptcy quickly.

El Segundo, Calif.-based DirecTV, the nation's largest satellite TV operator, had objected to Charter's request for a temporary restraining order, saying in a court filing that its ads truthfully told customers about Charter's Chapter 11 reorganization as being possibly disruptive to subscribers.

DirecTV spokesman Robert Mercer said the judge will let the company continue to run the ads if it modified certain statements about the outcome of Charter's bankruptcy.

"We are still able to point to the fact that Charter is in bankruptcy and the outcome is uncertain," he said.

Charter said the ads have been running in print, radio, billboards and direct mailings to consumers in Connecticut, Illinois, Louisiana, Michigan, Missouri, Nevada, South Carolina, and Wisconsin.

Charter sought bankruptcy protection to reorganize $21.7 billion in debt. It has never made a profit since going public in 1999 after piling up debt due to acquisitions.

Source: http://www.businessweek.com/ap/financialnews/D985M3DG4.htm


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