Will Drahi end the creditor-on-creditor violence era?
Top money managers Apollo, Ares, BlackRock and Oaktree have been called many things over the years. But “illegal cartel” might be a new one.
The accusation was levied by Altice USA, the troubled telco led by Patrick Drahi, in a lawsuit filed on Tuesday. Altice USA alleges that its creditors violated US antitrust laws by colluding in an attempt to force the company into bankruptcy.
The suit centres on a document known as a co-operation agreement (read: NON-co-operation agreement), which stipulated no creditor could cut a deal with Drahi without permission from the group. The holders of nearly every dollar of Altice USA’s $26bn debt stack signed it.
DD has long covered the distressed debt wars and their legal machinations but a competition claim is novel (the FT scooped last month a similar claim involving Selecta, the Swiss vending machine company).
Experts are divided on whether antitrust law can be successful in resolving what are typically contract or securities law disputes.
At DD we find it humorous that a dispute involving the likes of Drahi, Kirkland & Ellis, PJT Partners and Apollo has anyone claiming the moral and legal high ground or displaying righteous indignation.
A senior person at one of the boldfaced vulture funds in the co-operation group cheekily sent an FT reporter Tuesday night the long profile of Drahi published in The New Yorker over the summer, intimating that maybe the tycoon was the roughest character in this tussle.
Perhaps this will be the moment the distressed debt battlefield tilts back to hedge funds after years of brutal “creditor-on-creditor violence” losses.
DD will follow this latest drama if for no other reason than to track the bruised egos and low-grade epithets.