XM subsidiary

I apologize if this question has already been addressed. Since XM is a wholly owned subsidiary of the parent company SiriusXM and most of the 2009 debt is XMs debt, isnt it possible for the parent company to bankrupt the XM subsidiary without eliminating the common stock? Let Mr. Ergan bid for the XM assets he desires in bankruptcy proceedings (satellites, repeaters, etc.) The main thing SiriusXM (the parent company) should really care about is the subscribers. If Sirius could still broadcast to all subscribers radios using their remaining satellites, couldn't this be a possibility? They are supposed to launch a new satellite this year. I also dont know how the spectrum would come into play in all this. So, I'm probably grasping at straws here but anybody have any intelligent responses?

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Originally Posted by Allday

I apologize if this question has already been addressed. Since XM is a wholly owned subsidiary of the parent company SiriusXM and most of the 2009 debt is XMs debt, isnt it possible for the parent company to bankrupt the XM subsidiary without eliminating the common stock?

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The problem with this is that it is the Sirius debt that is up first -- that Sirius could be defaulting over. Not the XM debt yet.

Furthermore, with 50% of this companies assets tied up in XM -- defaulting the subsidiary would tie up those assets, which would have a profoundly negative impact on the common stock of the corporation.



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