With Charlie Ergen breathing down his neck, Mel Karmazin is reported to be preparing a possible Chapter 11 bankruptcy filing for Sirius XM to put pressure on the EchoStar CEO. The New York Times reports that Sirius XM has retained a bankruptcy law firm and a restructuring expert. With $175 million of bond debt due on February 17th – much of it believed to be held by EchoStar – the threat of a bankruptcy filing by Sirius XM could force Ergen to make a formal takeover bid, rather than take his chances with the outcome of a Chapter 11 proceeding. Still unclear is whether Ergen is actually interested in running the satellite radio business, or wants the spectrum and satellites that Sirius XM owns for other purposes.
