By Rebecca Stone, Telecom Gazette

Cable One has asked a New York federal judge to dissolve a temporary restraining order blocking its $480 million acquisition of the 55% of Mega Broadband Inc. (MBI) it does not already own, accusing lender CoBank of a campaign to "torpedo" the deal.

The brief, filed Monday, arrives days after the judge's October 9 order halted the transaction just as it was set to close. CoBank, which holds $1.1 billion in outstanding loans to Cable One, obtained the emergency order by arguing the deal amounts to a "fraudulent transfer" that would jeopardize its credit exposure.

What is at stake?

The target is no marginal asset. MBI owns Vyve Broadband, an operator with roughly 210,000 customers and a footprint passing about 657,000 locations as of September 2025 — a scale comparable to a mid-sized regional US cable operator. Cable One began the transaction in 2020, acquiring 45% of MBI with an option to buy the rest starting in 2023.

Cable One disputes that CoBank faces any genuine emergency. The operator holds that CoBank failed to establish an "imminent risk" that quarterly amortization payments of about $2.5 million — roughly $10 million a year — would go unpaid after the transaction closes.

"CoBank cannot show any 'actual and imminent' risk of any harm to its interests – much less an irreparable one," Cable One told the court.

The operator notes it has never missed a loan payment and that lenders retain remedies if that were to change. It also disclosed that CoBank itself pitched "several financing proposals" during months of negotiations, only to litigate when Cable One chose a rival package.

"Upset that CABO chose the proposed transaction with GTCR and its lender group as being in the best interests of CABO over CoBank's preferred transaction CoBank embarked upon a campaign to torpedo the GTCR deal," the brief states. "And CoBank waited until the very day that closing was set to occur before rushing into court seeking to exploit an 'emergency' of its own creation."

Why the clock is ticking

Behind the court fight sits a financing arrangement with an expiry risk. By October 2, Cable One, private equity firm GTCR LLC (which formed MBI) and all of Cable One's revolving lenders except CoBank had agreed in principle on a deal set to close October 9. It would have provided a new $1.3 billion loan, with $480 million earmarked to repay revolving debt and give the operator, in its words, "additional runway to execute on its business priorities."

Cable One also alleges CoBank bought its debt on the secondary market on October 8 — the eve of closing — in an effort to disrupt the arrangement.

The operator is asking the court either to lift the restraining order or to require CoBank to post a $480 million bond if the order stands and a hearing proceeds. Further delay, Cable One argues, creates "material risk" to the interlocking financing commitments.

What about shareholders?

The market has already rendered its verdict on the dispute. Cable One shares fell 20% when CoBank filed its complaint and kept dropping in after-hours trading, before recovering nearly 10% in afternoon trading on Monday. The stock remains down 88% year-to-date — a decline that frames how much of the company's valuation investors now tie to resolving its balance sheet.

"Every day the TRO remains in place, CABO risks losing the financing partners whose interlocking commitments it needs to satisfy its contractual obligation to GTCR and shore up its balance sheet; its stockholders continue to bear the uncertainty that has already driven down the Company's stock price; and the employees of both CABO and MBI remain in limbo," Cable One told the court.

Notably absent from Cable One's brief is any detailed rebuttal of CoBank's core "fraudulent transfer" claim on the merits; the filing leans on procedure and harm instead. The judge must now weigh whether to dissolve the order, set a bond, or proceed to a full hearing — with the fate of the $480 million deal and its $1.3 billion financing package resting on that schedule.