February 16, 2009 / 7:26 AM / 10 years ago

Sirius creditors threaten to oust CEO: report

(Reuters) - A group of Sirius XM Radio Inc creditors will seek to remove Chief Executive Mel Karmazin if the company chooses a bankruptcy filing over a deal with an investor that would let it stay solvent, the Wall Street Journal said.

A Sirius Satellite Radio SC-V1 audio/video tuner is displayed during the 2007 International Consumer Electronics Show (CES) in Las Vegas, Nevada in this January 9, 2007 file photo. REUTERS/Steve Marcus

“Creditors will act quickly and definitively if they perceive that management is (not) acting ... in the best interest of the estate,” the paper quoted Edward Weisfelner, a partner with Brown Rudnick LLP - the law firm representing the creditor group - as saying.

The satellite radio company said in response that its management is “continually working to ensure the best possible outcome for the enterprise,” the Journal reported on its website on Sunday, adding that a final decision on Sirius’ future is expected on Monday.

Liberty Media Corp is in talks with Sirius to invest but not take it over, a source said on Friday, as Sirius tries to stave off a bid by EchoStar Corp.

The talks with Liberty are seen as a last-ditch attempt by Karmazin to hold off EchoStar, which holds $175 million in Sirius convertible bonds due on February 17.

Sirius said it had refinanced some debt that was due in December, but added that it still might have to file for Chapter 11 bankruptcy protection if talks toward refinancing other debt did not yield results by Tuesday.

SIRIUS XM Radio CEO Mel Karmazin speaks at the Reuters Media Summit in New York in this December 3, 2008 file photo. A group of Sirius XM Radio creditors will seek to remove Karmazin if the company chooses a bankruptcy filing over a deal with an investor that would let it stay solvent, the Wall Street Journal said. REUTERS/Mike Segar

Reporting by Ramya Dilip in Bangalore; editing by John Stonestreet

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