May 12, 2009

Charter Communications Suing DirecTV Over Ad Campaign

DirecTV Group Inc. is being sued by Charter Communications Inc. over advertisements that persuade subscribers to switch TV services by touting Charter's bankruptcy filing.

Charter filed for Chapter 11 reorganization in March and is charging the satellite TV operator with using "false and misleading" ads claiming that Charter could not provide the latest in technology, add high-definition channels, or offer new exclusive programming because of its financial troubles.

Charter has said that it has been able to do all that and expects to emerge from bankruptcy protection quickly.

The ads have been running in print, radio, billboards and direct mailings to customers in Connecticut, Illinois, Louisiana, Michigan, Missouri, Nevada, South Carolina, and Wisconsin, according to Charter.

Charter filed for the suit on Monday in the U.S. District Court in St. Louis, where the company holds its headquarters.

Robert Mercer, DirecTV spokesman, said that the company has not seen the lawsuit and "we stand by the accuracy of our advertising."

Charter sought out bankruptcy protection because of its $21.7 billion in debt.  Since going public in 1999, Charter has not yet made a profit due to piling up debt because of acquisitions.


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