As if being stuck between John Malone and Charlie Ergen wasn’t enough, Mel Karmazin now has angry creditors on his tail.
The Sirius XM boss is trying to decide — as soon as today — whether he’ll take the satellite radio giant into bankruptcy or risk selling a significant stake to Malone and Ergen. Either way, he could end up kicked to the curb.
The Wall Street Journal is reporting that Karmazin is in the crosshairs of a group of creditors which is threatening to dump him and his team if they put the company into Chapter 11 instead of hammering out a rescue deal.
Edward Weisfelner, a partner with Brown Rudnick LLP, the law firm representing the creditor group, said:
“Creditors will act quickly and definitively if they perceive that management is acting in their own interest and not in the best interest of the estate. The board of directors should carefully consider the ramifications.”
Karmazin, the man who put Sirius and XM together, is wary of longtime adversary Ergen doing a deal, then blowing him out. And Malone is, well, Malone. Even though he seems the friendlier option for Karmazin because he’s has shown little enthusiasm to actually run anything in many years. Malone has, however, managed to create significant problems for Barry Diller and Rupert Murdoch simply by buying stakes in their media giants.
Either way, Mel’s over a barrel.