A group of creditors, including Apollo Global Management and Oaktree Capital, has filed a lawsuit against French billionaire Patrick Drahi over a contentious debt restructuring at his U.S.-based telecommunications company, Optimum Communications. The bondholders contend that Drahi is personally responsible for a plan to transfer the company’s most valuable pay-TV assets out of their reach, undermining their ability to recover funds.
The dispute centers around Optimum Communications, formerly known as Altice USA, which has faced persistent financial difficulties with debts exceeding $20 billion. Among this debt are approximately $6 billion in bonds maturing in 2027. The bondholders argue the company has long been insolvent, attributing its financial troubles to what they describe as Drahi’s “infamous business strategy,” often referred to as the “Altice Way.”
In June, Optimum moved its Cablevision business, a profitable pay-TV operation serving millions of customers in the New York City area, into a newly created entity dubbed an “unrestricted holdco.” Creditors were excluded from claims on this entity. This new vehicle raised $3 billion in senior debt from JPMorgan Chase and an additional $300 million in junior preferred equity from investors outside the existing Optimum creditor community.
Optimum characterized the restructuring as a step intended to prompt negotiations with creditors, who face substantial losses on the face value of their bonds. However, the bondholders see the move as a deliberate attempt to place key assets beyond their reach.
The legal battle has amplified tensions between Drahi’s operations and some of the world’s largest credit funds, each vying for control amid ongoing concerns about the company’s viability and debt load. The case draws attention not only for its scale but also for the broader implications it may have for future disputes involving distressed debt restructurings.
In a related development, Altice has initiated its own legal action against the bondholder group, accusing them of creating an “illegal cartel” by agreeing to negotiate as a unified bloc in the restructuring discussions. The creditors have denied these allegations and have moved to dismiss the suit.
The case has also highlighted the complexities within financial institutions involved. JPMorgan’s asset management division, which holds bonds and is part of the plaintiff group, contrasts with JPMorgan’s commercial banking arm, which provided financing to the newly formed “unrestricted holdco.” This dual role reflects the intricate dynamics at play in large-scale debt restructurings.
Optimum maintains that the bondholders’ claims lack merit and insists that its actions to protect and maximize stakeholder value have been carried out in full compliance with its debt agreements and governing laws. Representatives for JPMorgan and Patrick Drahi did not immediately respond to requests for comment.