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Creditors Seek Dismissal of Optimum’s Antitrust Lawsuit Amid Debt Restructuring Fight

By  |  February 8, 2026

Creditors of Optimum Communications have asked a federal judge to throw out the telecom group’s antitrust lawsuit, escalating a contentious battle over the company’s $26bn debt burden. The dispute centers on whether a group of major asset managers acted unlawfully by negotiating collectively during restructuring talks.

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    According to the Financial Times, creditors filed a motion late Friday in Manhattan federal court requesting dismissal of a lawsuit Optimum launched in November. The telecom company had accused several leading investment firms of forming an illegal cartel in the course of debt renegotiations.

    The defendants include Apollo Global Management, Ares Management and BlackRock, among others. Per the Financial Times, these firms entered into a co-operation agreement last year that required participating creditors to negotiate restructuring terms with Optimum as a unified group rather than individually. Their court filing argues that US antitrust laws should not apply to such an arrangement.

    Optimum, previously known as Altice USA and controlled by French billionaire Patrick Drahi, has struggled under a heavy debt load. The company contends that the co-operation agreements between creditors unlawfully restrict competition. However, attorneys representing the investor group rejected that assertion in strong terms. “Optimum received from its creditors billions of dollars in a freely competitive market,” the investors’ counsel at Sullivan & Cromwell wrote. “The notion that antitrust law entitles Optimum to have its creditors ‘compete’ over sweetening the terms of outstanding debt defies logic.”

    The case has drawn attention across the $3tn US junk bond and leveraged loan market. According to the Financial Times, more than 90 per cent of Optimum’s outstanding debt is covered by the co-operation pact, and the company’s complaint names dozens of defendants. In addition to Apollo, Ares and BlackRock, the creditor group includes Oaktree, Loomis Sayles, GoldenTree Asset Management, Prudential and JPMorgan’s asset management division.

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    Read more: Optimum Sues Major Lenders, Alleging Antitrust Violations in Debt Refinancing Block

    Per the Financial Times, the investors maintain that their collaboration is “pro-competitive,” arguing that collective negotiations can stabilize restructuring processes. In their filing, the creditors criticized so-called “creditor-on-creditor violence” transactions, in which rival investor groups offer competing rescue financing packages. These deals can subordinate the claims of losing creditors, often leaving their holdings severely impaired or effectively worthless.

    The creditor group contended that such tactics have damaged US capital markets and should be discouraged. “[Co-operation agreements] reduce transaction costs and the destructiveness of brinkmanship,” they wrote, adding that these arrangements encourage “the very mutual forbearance that can keep a borrower operating.”

    The legal battle has had repercussions beyond the courtroom. According to the Financial Times, Kirkland & Ellis, which had advised Optimum on transactional matters at the time of the lawsuit, recently stepped down. Large asset managers had reportedly attributed the antitrust litigation strategy to the firm, even though a smaller Washington-based boutique was retained to formally file the case. Optimum has since engaged White & Case to handle debt negotiations.

    The Financial Times previously reported that JPMorgan faced criticism from some asset managers after extending a $2bn loan to Optimum in November. The financing package also enabled the transfer of certain company assets away from existing creditors, a move that intensified tensions among stakeholders.

    Optimum defended its decision to pursue litigation, stating: “We brought this action to defend our legal rights, and our objective remains to protect Optimum’s ability to access competitive and fair credit markets.”

    The case is now before US District Judge Jeannette Vargas, who has instructed both sides to appear in court later this month to determine the next procedural steps. As restructuring pressures mount, the outcome could shape how creditors collaborate in future high-stakes debt negotiations.

    Source: The Financial Times