Fulfilling the terms of an agreement reached with bondholders in February, Charter Communications submitted a petition for Chapter 11 protection last Friday to the U.S. Bankruptcy Court for the Southern District of New York. The bankruptcy petition would restructure a portion of the debt owed by St. Louis-based Charter, the nation’s fourth largest cable operator with more than 5.5 million subscribers. At the end of last year, Charter listed total debt obligations of $21.7 billion with annual interest costs approaching $2 billion. Upon completion of the reorganization plan, Charter would be left with $13 billion in bank debt that is due to mature between 2013 and 2015 and that would carry annual interest costs of $1.1 billion. Under the agreement, bondholders in possession of $8 billion in Charter debt would convert their debt into equity shares of the reorganized entity. The post-bankruptcy company would also raise up to $2 billion through a common stock rights offering to be backed by bondholders who have pledged to invest $3 billion in the company. That investment would consist of $2 billion in equity, $267 million in new debt, and $1.2 billion in debt rolled over from the old company to the post-bankruptcy entity. Paul Allen, the founder of Charter and the co-founder of Microsoft, would receive a 35% voting stake in the reorganized entity. Applauding the Chapter 11 plan as “good news,” Charter President Neil Smit said, “we look forward to an expeditious restructuring, and once completed, we believe that Charter will be a stronger company.”