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Spectrum Resorts to Gutter Level Tactics PDF Print E-mail
Thursday, 11 April 2019 10:01

Bankrupt telecom provider Windstream Holdings hit Charter Communications with a suit Friday, demanding that its rival cease a "despicable" false advertising campaign that allegedly tells Windstream's customers it will shut down service and urges them to switch to Charter. Charter is the parent company of Spectrum.

In Friday's complaint, Windstream, which filed for bankruptcy in February after losing a $310 million courtroom battle to a hedge fund creditor, told the New York bankruptcy court overseeing its Chapter 11 campaign that Charter's actions have sowed chaos and confusion amongst its customers.

Windstream said its fundamentals are strong and its bankruptcy only a straightforward restructuring that won't affect its operations. Nonetheless, Windstream said, Charter has used the occasion to embark on a "scare-tactic campaign to mislead, deceive, and confuse consumers."

Windstream is seeking a temporary restraining order that would prevent Charter and its subsidiary Spectrum from continuing its false advertising campaign, as well as unspecified monetary damages and attorneys' fees. The case is Windstream Holdings Inc. et al. v. Charter Communications Inc. et al., case number 18-08246, in the U.S. Bankruptcy Court for the Southern District of New York.

Charter has been sending mailers to its customers in the South and Midwest in envelopes that mimic the distinctively colored packaging Windstream uses in its own advertising.

Those mailers contain a message that begins: "Windstream Customers, don't risk losing your internet and TV services." The letter goes on to say that while "Windstream's future is unknown … Spectrum is here to stay."

"Goodbye Windstream, hello Spectrum," the letter concludes.

Windstream said that it had received dozens of calls from confused customers since Charter began sending the mailers, and that several had already switched services because of it.

"Charter is intentionally deceiving Windstream's customers," the complaint said. "The Chapter 11 filing has not disrupted the Debtors' operations nor created any ‘uncertainty' about Windstream's ability to continue serving its customers."

Windstream also said Charter had disconnected service to hundreds of its customers, and then told them that their service could not be "reinstated because of Windstream's failure to pay certain amounts due to Charter" when they called and asked to have their Windstream service reconnected.

Those actions amount to a direct violation of the automatic stay, a legal firewall that protects debtors from lawsuit and debt collection actions while they're in bankruptcy.

"The only ‘uncertainty' in Windstream's services since the Chapter 11 Cases have been deceitfully caused by Charter in violation of the automatic stay," Windstream said.

Windstream said the "great irony to Charter's tactics" is that they amount to "virtually the same bad acts for which Charter sought — and obtained — a TRO in its own Chapter 11 cases 10 years ago." This makes them "particularly offensive," Windstream said.

Windstream is referring to Charter's 2009 suit against DirecTV Inc., which allegedly engaged in a similar false advertising campaign targeting Charter's customers during its own bankruptcy. Charter succeeded in winning a TRO against DirecTV and the case was subsequently settled.

Windstream filed for Chapter 11 in February after a federal court ruling that a 2015 real estate spinoff left it in default of senior notes and owing a hedge fund more than $310 million.