Case Summaries · Luxembourg / New York

Altice International: lenders take Drahi to court in New York

Five years of asset moves, five prohibited transactions and a complaint asking the court to unwind them.

By EURx · 13 October 2026

Editor's note: we have written on Altice International before, starting with our 3 October thread on the dropdown and the default notice (here).

Who is suing whom

Lenders to Altice International filed a complaint in the Supreme Court of the State of New York, County of New York, on 13 October 2026, asking the court to unwind five years of asset transfers they say moved the group's collateral beyond their reach. It is the second suit of its kind inside Patrick Drahi's telecom empire in three weeks. On 28 September, more than 150 lenders to Optimum Communications, the former Altice USA, sued the company and Drahi personally in the same court. In the new case Drahi is not a named defendant, though the complaint describes him as the dominant controlling shareholder who directed the transfers.

The plaintiffs are funds represented by Gibson Dunn holding around $9bn of Altice International's secured debt, including Arini, King Street, Invesco, Sona, Diameter and Elliott. The defendants are 17 Altice entities, from the borrower Altice Financing up through Altice International, Altice Luxembourg and Altice Group Lux to transferees including Altice France TopCo, OcorIota and Geodesia.

The debt at stake

Altice Financing, a Luxembourg company, is the borrower. The credit agreement, dated January 2015, carries more than $3bn of term loans, and three indentures cover the senior secured notes: $1.2bn of 5.000% and $1.28bn of 3.000% notes due 2028, $1.925bn of 5.750% and $811m of 4.250% notes due 2029, and $375m of 9.625% notes due 2027. Altice International and subsidiary guarantors, among them Altice Portugal and Altice Caribbean, guarantee the debt. The plaintiff noteholders hold about $732m of the 2028 notes and the lender plaintiffs hold more than $1.5bn of the loans.

The five transfers the complaint attacks

First, the Luxembourg intercompany loans. From 2021, Altice International lent what the complaint puts at $5.4bn to its parent, Altice Luxembourg, in intercompany loans with no enforceable interest rate and maturities repeatedly extended, now to 31 December 2029. Altice Luxembourg has no operations. The complaint says the companies themselves described the transfers as dividends in 2023 and 2024 reporting and told the market no repayment should be expected, and that the loans were structured that way because Altice International's distributable capital, $162m in 2023 and $48m in 2024, could not support the amounts actually transferred.

Second, the April 2026 cancellation. Altice International issued mandatory convertible notes to Altice Luxembourg in 2015, which it could have converted into equity at no cost since 2020. On 15 April 2026 it converted them into about 2.055bn new shares and cancelled those shares in the same resolution. Under Luxembourg law the cancellation created a $2.4bn obligation to Altice Luxembourg, which Altice International then set off against the intercompany loans. The complaint calls the sequence a manufactured way to extinguish a $2.4bn receivable for nothing.

Third, the BT stake. In October 2021 Altice International lent $681m to Altice UK to help fund its accumulation of a 24.5% stake in BT Group. When Altice UK sold the stake for about $4.2bn in August 2024, the loan was not repaid. Instead it was released and novated to Altice Group Lux, then to Altice Luxembourg, and the complaint says the transfer was not disclosed until late October 2025.

Fourth, the Altice France equity. Altice Luxembourg's 100% holding in Altice France Holding, the parent of SFR, was assigned a contribution value of $6.7bn when it was moved to Altice Group Lux for no consideration in early to mid 2025, and on to Altice France TopCo on 16 July 2025. The complaint says the transfer was omitted from the subsequent events section of Altice Luxembourg's 2024 annual accounts, filed 20 October 2025. Bids for SFR and related assets have reached about $24.6bn, with a revised proposal expected at or above $26.9bn.

Fifth, OXG. Altice Luxembourg's 50% stake in the OXG fibre joint venture with Vodafone, into which it had contributed about $206m, was sold to Geodesia in December 2024 for about $206m, roughly $194m of it forgiveness of intercompany receivables, with the sale agreement backdated to 30 September 2024. Geodesia's board includes David Drahi, the founder's son. On or around 1 September 2026 Geodesia agreed to sell the OXG stake to Société Générale.

Project Déjà Vu

The transaction the case turns on was announced on 28 November 2025. Altice International designated Altice Portugal and Altice Caribbean as unrestricted subsidiaries, purporting to release the liens and guarantees securing the plaintiffs' debt. Altice Portugal then borrowed about $865m from Fidera Group, a London investment manager, in debt structurally senior to the plaintiffs, with the company telling the market it could raise $2.3bn more on the same basis. The Caribbean holding chain was merged out of the restricted group through two new entities, OcorTheta and OcorIota, the latter a subsidiary of Altice Group Lux.

Portugal and the Dominican business together produced 79.8% of Altice International's trailing adjusted EBITDA. The complaint says the steps removed roughly 80% of the collateral value behind the secured debt, and that net secured leverage went from 5.2x to over 25x.

Prices and ratings moved with it. On the complaint's figures the 2028 secured notes fell from 77 to 66 the week of the announcement and the 2029s from 74 to 65, the senior unsecureds dropped from the mid-30s to as low as 18, and S&P cut Altice International from CCC+ to CCC.

The default path

Holders of more than 25% of the 2028 notes, about $732m, delivered a notice of default under the 2020 indenture on 14 July 2026 and asked the trustee, Deutsche Bank Trust Company Americas, to pursue remedies. The trustee confirmed receipt but has taken no action. The complaint pleads that the covenant breaches became events of default on 12 September 2026, sixty days after the notice, and that Altice Financing also failed to honour the change of control put at 101 after the rating decline that followed the Portugal designation.

The claims

The plaintiffs plead seven contract claims under the 2020 indenture and the credit agreement, covering affiliate transactions, fundamental changes, change of control, the release of collateral, restricted payments, alter ego liability for Altice Luxembourg and Altice Group Lux, and breach of the implied covenant of good faith. Twelve fraudulent transfer claims are brought under New York's Debtor and Creditor Law and six under Luxembourg law, including actio pauliana claims and, for the France and OXG transfers, derivative action oblique claims brought on behalf of the estate. A final claim seeks an injunction against further transfers.

The relief sought includes unwinding the transfers, restoring the France and OXG equity and the Caribbean chain, reversing the BT novation, a senior lien over the diverted assets and their proceeds ahead of the Fidera loan, and punitive damages.

What happens next

In Altice France's restructuring, Patrick Drahi kept 55% of the equity while lenders took an €8.6bn haircut. The New York suits test whether that playbook survives contact with New York fraudulent transfer law and Luxembourg's revocatory action. Watch Drahi's response and any counterclaim, the group's existing federal antitrust case against the lender group, which the creditor firms deny, and what the litigation does to the restructuring talks at Altice International.

Sources

1. Complaint, ACOF II S.à r.l. and others v. Altice Financing S.A. and others, Supreme Court of the State of New York, County of New York, NYSCEF document 2, filed 13 October 2026 (Gibson Dunn for the plaintiffs)
2. FT, Creditors sue Patrick Drahi's Altice International over asset shifts, 12 October 2026
3. Bloomberg, Optimum, Patrick Drahi sued by creditors who allege fraudulent deal-making, 28 September 2026 (Reshmi Basu)
4. FT, Apollo and Oaktree sue Patrick Drahi over US telco restructuring, 29 September 2026
5. Global Restructuring Review, Lenders sue Optimum and Patrick Drahi over alleged asset-shifting scheme, 6 October 2026
6. Broadband Breakfast, Creditors sue Optimum, allege fraudulent schemes to address billions in debt, 29 September 2026
7. 9fin, Altice International secured creditors make first move against Drahi drop-down, 15 July 2026
8. FT, Patrick Drahi's "super aggressive" asset move hits Altice International bonds, December 2025
9. The Economist, Patrick Drahi has bested his lenders yet again, 4 December 2025
10. Bloomberg Opinion, $22 Billion Drahi lawsuit is the best bad option for creditors, 8 October 2026 (Chris Hughes)
11. Reuters Breakingviews, Patrick Drahi has a weak hand in US creditor clash, 9 October 2026