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More details on Sirius XM's possible bankruptcy

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Hope you aren’t a Sirius XM shareholder. When word broke last night that the company had retained the services of some fancy bankruptcy lawyers—the worst, that bankruptcy could be filed “within days”—fans of the service, naturally, started to freak out. There’s a few more details today that may be worth your time, such as the water cooler talk that this could all be a ploy by CEO Mel Karmazin to get Dish Network to help out just a little bit more.

It’s like this: EchoStar CEO Charlie Ergen is looking to take control of Sirius XM. (EchoStar is the parent company of Dish Network.) To that end, he offered to give the ailing company several hundred million dollars of capital and to restructure the company’s debt. As it stands, Sirius XM has a boatload of outstanding debt that needs to be addressed in the coming weeks: the company has till February 17 to come up with $175, or it may be forced into bankruptcy. And since there’s that pesky recession, that means there’s pretty much no credit to be found, anywhere. (Unless you’re Real Madrid, in which case banks will hand over €70 million worth of credit like it’s nothing.) In short, Sirius XM could really use some of Ergen’s money.

The problem here is that Mel Karmazin, Sirius SM’s CEO, doesn’t exactly want to hand over control of the company; it’s his baby.

Then there’s the small problem of bankruptcy, which, according to the WSJ, would expose Sirius XM management to shareholder lawsuits.

Now, yesterday’s threat of bankruptcy could just be Karamazin saying, “Look, we’re in trouble. If Ergen—or anyone—would help us out here we wouldn’t have to go through bankruptcy proceedings.”

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