Creditors have filed suit against Optimum (European data center operator) and controlling shareholder Patrick Drahi over the handling of the company's US operations restructuring and debt obligations.

A group of creditors, including Apollo Global Management and Oaktree Capital, has filed a lawsuit against Optimum and its parent entities, majority shareholder Patrick Drahi, former CEO Dexter Goei, and others in New York state court.

Optimum operates as a brand of Altice USA, which acquired Cablevision for $17.7 billion in 2016. The company provides Internet, television, mobile, and home phone services across 21 states.

In their complaint, creditors allege that Optimum orchestrated a series of fraudulent transfers designed to move billions in assets beyond the reach of debtholders. They claim the company executed collateral transfers without legitimate business justification, prioritizing the equity interests of majority shareholders ahead of creditor claims on the $21 billion in debt that Optimum entities carry. According to the filing, "The company is hopelessly insolvent and has been for some time—a direct and inevitable result of Drahi's infamous business strategy, the 'Altice Way.'"

The creditors characterize this strategy as a "churn and burn" approach. Under this model, Drahi and his "hand-picked executive team of loyalists" aim to create substantial short-term value through aggressive cost-cutting and significant debt accumulation, without regard to the business's long-term outlook. As the bondholders stated: "The short-term value created by the 'Altice Way' is then siphoned off to Drahi and his associates through management fees, dividends or gratuitous compensation awards, while the business is left with hamstrung operations and unsustainable debt obligations and, ultimately, its creditors suffer the consequences of Drahi's value stripping."

The lawsuit follows Optimum's June announcement that it had moved its Cablevision business into an "unrestricted holdco"—a new entity on which creditors hold no claims. The restructured company raised $3 billion in senior debt from JPMorgan Chase and $300 million in junior preferred equity from investors outside the existing creditor group. Optimum stated at the time that the restructuring would create a path for the company and its creditors to reach an agreement.

Optimum has denied the allegations, stating it "strongly disagrees with the co-op group's allegations and believes their claims are without merit."

Drahi is pursuing asset sales to reduce Altice's debt burden. The company recently sold its French data center assets—comprising more than 250 facilities—to Morgan Stanley after spinning them into a separate entity. Altice also divested a 24.5 percent stake in BT. The company is currently in discussions regarding the sale of its Portuguese mobile unit and has explored selling its Portuguese data center operations. Additionally, Altice has shortlisted four bidders for a controlling stake in French fiber company XpFibre, in which it currently holds a 50.01 percent majority.