- Cable One’s $480 million Mega Broadband deal is on hold following an order from a New York judge
- CoBank, a Cable One lender, alleges Cable One is insolvent and overpaying for MBI
- Cable One says it will fight the claims and points to a separate GTCR financing plan meant to address its debts
A New York District Court judge issued a temporary restraining order preventing Cable One from completing its acquisition of a 55% stake in Mega Broadband Investments (MBI), after lender CoBank sued to stop the deal.
CoBank, one of Cable One’s existing lenders, filed suit against Cable One late last week, arguing the operator is “currently insolvent” and grossly overpaying for assets it knows are worth substantially less. According to court documents, the deal was set to close the day the restraining order was issued.
Cable One said in a statement the judge’s decision was issued before it had a chance to appear in court. “The Company strongly believes CoBank's claims are incorrect as a matter of law. Cable One intends to vigorously dispute these claims and protect its interests,” it stated.
The operator added that under the terms of its deal with MBI, it’s not obligated to close the deal while legal restraints are in effect.
What is CoBank alleging?
Cable One announced its plans to acquire 55% of Vyve Broadband parent company MBI in January, a move that – combined with its existing shares – would give it full ownership of the company.
In its court filing, however, CoBank alleged the $480 million price tag for the deal was “grossly disproportionate” to the value of the stock it was acquiring. CoBank pointed to the fact that Cable One noted a $425.9 million “MBI option liability” in its Q2 2026 10-Q filing, arguing this implied a real valuation of the MBI stock at around $54 million.
It also argued that based on Cable One’s recent net loss of $1.16 billion, liabilities and falling stock price that the company is “currently insolvent based on standard valuation methodologies.” Completing the deal would sink it “deeper into insolvency” and impair the value of its remaining assets.
CoBank holds around $1.1 billion in secured loans to Cable One, meaning it has an interest in ensuring the value of the operator’s assets doesn’t deteriorate.
In its statement announcing the judge’s order, Cable One said it has made “substantial progress” toward a series of financial transactions with private equity firm GTCR that would “address $2.45 billion of the Company’s current obligations and nearest-term debt maturities.” It noted, however, that the GTCR financing deal is subject to the resolution of the court order.