Apollo, other firms accused of of blocking debt refinancing in US antitrust lawsuit
By Mike Scarcella
WASHINGTON, Nov 25 (Reuters) - Apollo Capital Management APO.N, BlackRock BLK.N and six other financial firms were sued on Tuesday in federal court in Manhattan by broadband provider Optimum Communications, which accused them of colluding to block it from refinancing billions of dollars in debt.
Optimum, formerly Altice USA, alleged the firms formed a “cooperative” that controls nearly all of its outstanding loans and bonds, effectively locking the company out of the U.S. leveraged-finance market.
The lawsuit said the firms signed an agreement in July 2024 that requires a two-thirds supermajority to approve any deal with Optimum, and bars individual creditors from negotiating with Optimum without group consent. It said the alleged “group boycott” violates federal and New York antitrust laws.
The restrictions have inflated borrowing costs and prevented Optimum from repurchasing its own debt at market prices, according to the lawsuit.
The other named defendants are Ares ARES.N, GoldenTree, J.P. Morgan Investment Management, Loomis Sayles, Oaktree Capital and PGIM, the asset management unit of Prudential PRU.L.
None of the firms immediately responded to requests for comment.
Long Island City, New York-based Optimum said in a statement on Tuesday it was taking action "to protect our legal rights and enhance our financial flexibility moving forward.”
Optimum, which serves 4.4 million residential and business customers across 21 states, provides broadband, video, telephone and mobile and related services.
The lawsuit said the defendants collectively hold 99% of Optimum’s loans and bonds and together control about 88% of the relevant credit market.
Optimum said it is currently solvent and able to meet its contract obligations, but warned that the alleged conspiracy blocking access to capital makes a bankruptcy more likely.
The complaint said the alleged cartel “is now threatening to starve Optimum of capital until it has to capitulate” and waive debt-management flexibility.
Optimum asked a judge to void the cooperation agreement and to award unspecified monetary damages.
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