Judge: Charter Must Pay Windstream $19 Million for 'Egregious,' Deceptive Mailer

A bankruptcy judge has ordered Charter Communications to pay Windstream more than $19 million in connection with a deceptive mailer that it sent out addressing Windstream’s chapter 11 bankruptcy.

Judge Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York handed down the order Thursday. Windstream told the court it lost nearly $20 million and 1,400 customers due to Charter’s mailer.

Windstream was asking court for a verdict requiring Charter to cover its losses, attorneys’ fees and litigation costs. The court sided with the Arkansas-based business communications giant.

Kristi Moody is executive vice president and general counsel for Windstream.

Windstream’s Kristi Moody

“We are gratified that Judge Drain’s ruling means Charter will have to pay a significant price for its egregious false advertising,” she said. “Charter knew full well what it was doing when it embarked on a dishonest scare-tactic campaign to lure away our customers. At Windstream, we will always aggressively defend ourselves and our customers against predatory schemes and meritless allegations.”

Charter declined comment on the matter.

Automatic Stay Violations

The summary judgment said Charter should be sanctioned because of its “misleading” ad campaign’s willful violation of the automatic stay under the bankruptcy code. The judge said Charter also violated the automatic stay by disconnecting service to a number of Windstream customers.

The judge said Charter “intentionally and wrongfully” interfered with Windstream’s customer contracts and good will.

After a year and seven months, Windstream exited chapter 11 bankruptcy last September with two-thirds of its debt erased and $2 billion in new capital.

In its suit, Windstream alleged Charter tried to deceive customers into believing Windstream would no longer provide services and was going to liquidate.

Windstream said it launched a promotional campaign to attract new customers to make up for the mailer’s impact. This promotional campaign cost the company more than $4 million.

In January 2020, the judge issued a partial summary judgement finding Charter liable for violations of the federal Lanham Act and state laws for using false advertising to try to convince Windstream customers that its bankruptcy filing meant they could lose their services.

Charter appealed the ruling, saying the evidence didn’t support Windstream’s claims. Windstream didn’t prove that the mailer harmed the company or its affiliates, the cable company said.