Cable One's proposed acquisition of the remaining 55% of Mega Broadband Investments has been temporarily blocked after lender CoBank challenged the purchase payment as a potential constructive fraudulent transfer. The dispute has emerged as the US broadband operator negotiates financing transactions intended to address $2.45 billion of obligations and near-term debt maturities.
The United States District Court for the Southern District of New York issued a temporary restraining order on 9 October 2026, preventing Cable One from completing the acquisition. CoBank, ACB, a lender under the company's existing credit agreement, brought the proceedings and is seeking an injunction against completion of the purchase.
The central issue is whether the proposed transfer of money to acquire the outstanding Mega Broadband interest could prejudice Cable One's creditors. CoBank alleges that payment of the purchase price would constitute a constructive fraudulent transfer. Cable One disputes the claim and maintains that the lender's legal arguments are incorrect.
A constructive fraudulent transfer claim concerns whether a company transfers assets for less than reasonably equivalent value under financial circumstances specified by applicable law. Unlike a claim based on intentional deception, this type of challenge can focus on the economics of a transaction and the financial position of the company making the payment.
That distinction matters because the lender's objection concerns the effect of the acquisition payment on creditor protection, not simply whether Cable One and the sellers had entered into a purchase agreement. The court has not determined that a fraudulent transfer would occur. Its order is temporary and was issued before Cable One appeared at a hearing.
The disputed transaction originates from a purchase agreement announced in January 2026. Cable One already owned 45% of Mega Broadband Investments Holdings LLC, while affiliates of private equity firm GTCR and Mega Broadband management held the remaining 55%.
GTCR investors exercised an existing put option on 2 January 2026. A put option gives its holder a contractual right to require another party to purchase an asset under agreed conditions. In this case, exercising the option triggered arrangements for Cable One to buy the remaining Mega Broadband equity interest.
The acquisition consideration was based on a formula involving Mega Broadband's adjusted earnings before interest, taxes, depreciation and amortisation and its net indebtedness. Cable One initially estimated the equity purchase price at approximately $475 million to $495 million.
The company separately estimated that Mega Broadband would have approximately $845 million to $895 million of net debt when it became wholly owned, principally through term loans maturing in November 2027.
These are different financial obligations. The purchase consideration relates to the payment for the remaining ownership interest, while the net-debt estimate describes indebtedness associated with Mega Broadband. Treating the two figures as interchangeable would misrepresent the transaction's economics.
Cable One and GTCR subsequently extended the acquisition completion deadline to 9 October 2026. The lender challenge and temporary court order arrived on that date, preventing the purchase from proceeding as scheduled.
The litigation also intersects with Cable One's broader refinancing negotiations. In its 12 October update, the company disclosed progress towards transactions involving GTCR, existing lenders and a consortium of private lending institutions.
The wider question of how regulatory and financial constraints affect lending capacity is also examined in Finance Gazette's analysis of the Bank of England and PRA's disputed £22.5bn capital requirements.
The proposed arrangements are intended to extend and reduce Cable One's revolving credit facility, settle the outstanding Mega Broadband put obligation and repay its B-4 term loan in full.
Collectively, the transactions are expected to address $2.45 billion of current obligations and nearest-term debt maturities while providing liquidity for investment in the business.
The $2.45 billion figure describes the financial obligations the proposed refinancing is intended to address. It is not confirmation that an equivalent amount of new funding has been secured.
Cable One said the parties had reached agreement in principle on material financing terms, but no definitive financing agreements had been executed. The company has also cautioned that the timing and outcome of the legal proceedings remain uncertain.
Under the acquisition agreement, Cable One is not required to complete the purchase while a legal restraint preventing closing remains in effect. The temporary order therefore delays completion without itself extinguishing the underlying put obligation.
In its 13 October submission, Cable One asked the court to dissolve the temporary restraining order. Alternatively, it requested that CoBank be required to post a $480 million bond if the restriction remains in place pending further proceedings.
Cable One also warned that continued delays could jeopardise its proposed $1.3 billion financing package, including plans to refinance approximately $480 million of revolving debt previously incurred to fund the put obligation. The court's decision therefore has implications beyond the acquisition itself, potentially affecting the company's wider refinancing arrangements, debt maturities and liquidity. The proposed financing remains uncertain, and the underlying legal dispute has not been resolved.
