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Patrick Drahi controls Optimum Communications, the fifth-largest cable television and broadband operator in the United States, and it owes its lenders about $21 billion.
Those lenders sued him and the company in New York on Monday, Sept. 28, demanding it unwind a series of transactions they say moved value out of their reach and into the pockets of insiders.
The transfers are what they want reversed. Optimum shifted assets generating more than $2 billion of annual earnings outside the group of companies that secure its debt, the creditors allege, through a restructuring announced in June that moved its eastern operations into a subsidiary lenders cannot touch.
Their lawyer put it bluntly. Rather than negotiating in good faith and acknowledging that Drahi and other shareholders are out of the money, Joseph Sorkin wrote, the company and its co-conspirators executed transactions that moved value available to satisfy creditor claims directly into the pockets of Drahi and other insider shareholders.
Out of the money means a company's debts exceed what it is worth, so its shareholders own nothing until the lenders are repaid in full. That is the point the creditors say Drahi refuses to accept.
Optimum rejects the claims. A spokesperson said the company strongly disagrees with them and considers them without merit.
Former chief executive Dexter Goei and current chief executive Dennis Mathew are named as defendants alongside Drahi and the company.
The debt is what drives all of it. More than $6 billion of the $21 billion falls due next year, and creditors holding over 90% of it have signed a cooperation agreement requiring them to negotiate as a single bloc rather than individually.
Drahi has been fighting that agreement in court. Optimum sued its own lenders earlier this year, including Apollo, Ares and BlackRock, calling the arrangement a classic illegal cartel and arguing it had been forced into financing two to three percentage points more expensive than it would otherwise have paid. The creditors sought dismissal, telling the court that Optimum had received billions of dollars from them in a freely competitive market.
A retail investor sued separately in Delaware in June, seeking to block the restructuring on the grounds that Drahi was reorganising the company on self-dealing terms without telling shareholders enough.
He assembled the business a decade ago. Drahi bought Cablevision from the Dolan family in 2015, rolled it together with Suddenlink into Altice USA, and renamed the company Optimum Communications this year.
The method was always borrowing. Drahi built the wider Altice group by taking on debt to buy telecoms assets across France, Portugal, Israel and the United States, which worked while money was cheap. The parent company's debt reached about €24 billion by 2023, and he sold Altice Média to Rodolphe Saadé for just over €1.5 billion in March 2024 to pay some of it down.
None of the allegations has been tested. They are claims in a civil complaint filed in New York State court, and no defence has yet been filed.
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