In telecommunications, like so many other industries, looking back at 2009 may now seem like standing on the edge of an abyss -- and hoping the edge doesn't collapse.

Amid bankruptcies and near bankruptcies, some investors did deploy their capital to meet long-standing strategic goals or to take advantage of opportunities that emerged from the chaos. Comcast Corp. took a controlling stake in NBC Universal Inc. (see story, page 34). John Malone's Liberty Media Corp. provided $530 million in capital to Sirius XM Radio Inc. and has already roughly doubled its investment.

One of the boldest moves was the bankruptcy court recapitalization of cable operator Charter Communications Inc. by a group of big noteholders.

Eric Zinterhofer, co-head of media and telecom for Apollo Management LP, was at the heart of the group that invested $1.6 billion in Charter. The funding underpinned Charter's reorganization and was litigated by banks that argued they should have been able to charge higher rates because of the bankruptcy.

As 2010 begins, Zinterhofer, 38, is now chairman of the nation's fourth-largest cable company, a seat previously occupied by Microsoft Corp. co-founder Paul Allen, who poured more than $7 billion into Charter over the years.

Indeed, it was a busy year for Zinterhofer, who declined comment for this article. It began with frenzied talks with Charter, which carried over from late 2008. Zinterhofer also oversaw the sale of German cable operator Unitymedia GmbH to Malone's Liberty Global Inc. Sprint Nextel Corp. bought iPCS Inc., another Apollo portfolio company. And he oversaw Apollo's $100 million stake in Indian satellite television operator Dish TV India Ltd.

The deals reflect Apollo's expertise in distressed debt but also include a gambit in Indian satellite TV more akin to venture capital.

Apollo's tactics can make it difficult to assess the success of some of its deals, which often involve distressed debt converted into equity. It's certainly much too early to declare Charter and Dish TV triumphs. After all, despite Apollo's track record, some of its investments, including Linens 'n Things Inc., Harrah's Entertainment Inc. and Realogy Corp., have struggled or failed.

One thing is clear: Though exits for Charter and Dish TV may be years away, the series of transactions that unfolded in the dark days of 2009 shows that Zinterhofer is emerging as a major figure in global communications.

Aryeh Bourkoff, UBS Investment Bank's head of telecom, media and technology, describes Zinterhofer as "incredibly patient" and "someone who takes an active role in terms of thinking strategically about the business and driving opportunities that are nonconventional."

UBS worked on all of Apollo's telecom and media deals in 2009, which would certainly produce some warm feelings. The bank advised the firm and other noteholders in Charter's reorganization. It also worked on the sales of iPCS and Unitymedia, the investment in Dish TV and Apollo's $2.4 billion purchase of theme park operator Cedar Fair LP in December, which was handled by Aaron Stone, who co-heads the media and telecom group with Zinterhofer.

Zinterhofer and Stone report to Apollo co-founders Leon Black, Joshua Harris and Marc Rowan.

Apollo considered buying a controlling stake in Charter in 2007 and had been in contact with Allen's Vulcan Capital. Still, the timing of the St. Louis cabler's restructuring took the firm, and nearly everyone outside management, by surprise.

Charter had succeeded in kicking the can of looming maturities from year to year. It appeared that 2010 would be the crunch year when Charter might be forced to reorganize. The company said in mid-December 2008 that it would proceed with a restructuring.

Jim Millstein, who is now the U.S. government's chief restructuring adviser but was then Charter's lead banker at Lazard, conferred with Zinterhofer and other noteholders. Although there was a broader group, Zinterhofer, Christine Villaluz of Franklin Advisers Inc., Oaktree Capital Management LP's Ken Liang and Jeff Marcus of Crestview Partners LP drove the talks.

Marcus is a cable veteran who sold Marcus Cable Co. to Allen for nearly $2.8 billion in 1998, providing a large portion of Charter's footprint. He declined Allen's offer to run the company. Apollo and Crestview had explored opportunities in cable previously and considered buying another cable company in 2005. When Millstein sought potential investors in Charter in 2007, he talked to Zinterhofer and Marcus. Zinterhofer pitched Apollo's co-founders on a joint purchase of a controlling stake in Charter. Apollo would contribute roughly $800 million, and Crestview would put up $200 million.

Apollo's investment committee turned down an outright takeover but favored buying Charter notes. The private equity firm began acquiring securities that would eventually prove key in Charter's bankruptcy.

In court pleadings, Charter's banks stated that in September 2008 Apollo bought Charter notes with a face value of $716 million and held more than $885 million by March 2009.

There were many issues that could have deterred the Charter noteholder group. An obvious one was the imploding economy, particularly since Charter's plan to exit bankruptcy forced it to deal with its banks. "Having the courage to make this kind of commitment at a time when it was a very, very dark moment in the world's financial life is one aspect," says Alan Kornberg of Paul, Weiss, Rifkind, Wharton & Garrison LLP, who represented bondholders. "To do it in a situation where there was huge litigation layered on top of it, it's fairly daunting."

In his 82-page order confirming Charter's bankruptcy, Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York in Manhattan, who also presided over the Lehman Brothers Holdings Inc. case, acknowledged the dimensions of the acrimony. "These are perhaps the largest and most complex prearranged bankruptcies ever attempted," Peck wrote, "and in all likelihood rank among the most ambitious and contentious as well."

Keeping $11.8 billion in bank debt in place without the blessing of lenders was one of the central goals of Charter's reorganization. Charter's banks argued that the four bondholders were a stealth takeover group that wanted to buy the company with the use of attractively priced debt raised before the crisis. The noteholders argued they were aligned by the similarities of their claims but operated as individuals and did not have a master plan.

During cross-examination, lawyers for the banks argued that reinstatement was necessary to make Charter a standout investment for Apollo.

"It's not going to be a Huntsman-Hexion, it's not going to be Linens 'n Things, it's not going to be a Realogy, it's not going to be a Harrah's. It's going to be a home run. That's what you hope?" Bruce Angiolillo of Simpson Thacher & Bartlett LLP, counsel to one of the lending banks, J.P. Morgan Chase & Co., asked Zinterhofer.

"With respect, we think a lot of those other investments could still be home runs," Zinterhofer replied.

In addition to Charter debt Apollo purchased before the reorganization, the firm guaranteed up to $755 million in a rights offering for Charter stock. Its final contribution is not public.

Charter exited bankruptcy protection in late November with $8 billion in debt stripped from its balance sheet.

CreditSights Inc. analyst Jake Newman says the company won't have significant maturities until 2012 or 2013. Though Newman suggests that Charter underestimated its capital expenditure needs as it faces increasing competition from telecoms, it has ample cash flow to handle increased spending. "It's certainly not going to drive them to the kinds of debt exchanges they've done in the past to extend the debt," he says.

Apollo holds a 31% economic stake and 20% of the voting stock. The firm was able to appoint two board members, Zinterhofer and Darren Glatt. Allen holds a larger voting stake and appoints more board seats but has only a sliver of an economic position.

Zinterhofer joined Apollo in 1998 after tenures at Morgan Stanley Dean Witter & Co., J.P. Morgan and Harvard Business School; he's married to Aerin Rebecca Lauder, daughter of Ronald Lauder of the Estée Lauder Inc. cosmetics fortune. The Apollo executive is also on the board of Central European Media Enterprises Ltd., one of Ronald Lauder's businesses.

Some of his more recent deals trace back to the early years of his Apollo tenure, such as the initial deals leading to Unitymedia. When Apollo bought Iesy Hessen GmbH & Co. KG in 2002 through what is said to be the first out-of-court restructuring in Germany, it was a wholly analogue service provider. Apollo gained control of the company by purchasing its debt.

In 2005, Iesy Hessen merged with another German cable operator, Ish NRW GmbH. The new company took the name Unitymedia and soon combined with BC Partners Ltd. portfolio company Tele Columbus GmbH & Co. KG. Unitymedia and Tele Columbus had "last mile" cable, the part of the network that connects directly to a user's home, in different markets. The deal closed in 2005, giving BC 39% of the company and Apollo 31%.

Analogue subscriptions still make up the bulk of Unitymedia's clientele, with 4.5 million basic subscribers. Unitymedia has added half a million digital TV accounts, close to 900,000 Internet subscriptions and more than half a million telephone lines. In addition, Unitymedia bought rights to German soccer broadcasting and formed a satellite TV service called Arena.

Unitymedia has been described as a "German Cablevision." Whereas Cablevision Systems Corp. has coveted subscribers in the New York metro area, Unitymedia operates in German regions that account for about a third of the country's GDP.

Unitymedia was preparing for an initial public offering in mid-October, when Liberty Global approached the company and its backers. The parties reached the sale by mid-November, although the offering could have proceeded if Malone had backed out.

By comparison, the $831 million sale of iPCS to Sprint Nextel was almost a foregone conclusion.

Like many of Sprint Nextel's regional partners, iPCS sued the telecom, arguing that the 2005 merger of Sprint and Nextel violated its affiliate agreements. Sprint Nextel settled most of the cases by acquiring the litigant. As operational and financial problems hit the Overland Park, Kan., carrier, Sprint Nextel allowed its litigation with iPCS to proceed.

Apollo held more than 8% of the stock in iPCS. The stake can be traced to another Sprint wireless affiliate, Horizon PCS Inc. In 2000, Apollo invested $126.5 million in Horizon convertible preferred stock. That position was wiped out in Horizon's 2003-'04 bankruptcy. Apollo also owned Horizon debt, however, and held about 38% of the company after the reorganization. Horizon and iPCS merged in 2005.

Apollo's positions in iPCS, Charter and Unitymedia reflect its dual identity as a private equity firm and a distressed-debt investor. Apollo's 2009 investment in Dish TV India fits more of a growth model.

Dish TV is part of Indian media conglomerate Zee Group and is the lead player in India's virally growing satellite TV market. Apollo has a roughly 11% position in Dish. Zinterhofer sat on Dish TV's board for two years before Apollo made its investment, giving his firm a clear view into Dish's operations.

While its other recent investments have been in cable, satellite is growing quickly in India. The Indian communications sector in general has attracted money from the U.S. Time Warner Inc. announced the $126.5 million purchase of Indian production company NDTV Imagine Ltd. in December. TA Associates Inc. said it will invest $45 million in mobile phone handset company Micromax Informatics Ltd. in January.

Since launching in 2003, Dish TV has gained 6 million subscribers. In fiscal year 2009, the company says it added 2 million, doubling its growth from the year before. "They are the market leaders in subs," says Vivek Couto of Hong Kong communications consultancy Media Partners Asia Ltd.

Couto suggests that Dish TV will have positive Ebitda in 2010. He estimates the company will not attain positive Ebit, covering the cost of capital expenditures for set-top boxes, until 2011 or 2012.

There is mounting competition, however. Sun TV Network Ltd. has been the most aggressive since launching in 2007, Couto says. Tata Sky Ltd. and Bharti Airtel Ltd. also have satellite service.

Across geographies, consolidation is often part of the story line in pay television and telecom.

During Charter's bankruptcy, a recurring theme, declared a virtual certainty by the banks, was that the bondholders would flip Charter to another cable operator using their funding. A sale to Comcast looks less likely today. Since purchasing a controlling stake in NBC Universal from General Electric Co., the Philadelphia cabler has downplayed additional large acquisitions.

While the Charter bondholders may not be long-term holders, it's also not at all certain that the company will quickly sell. Charter could strike deals with other cable providers in markets at the edge of its network, where it lacks a strong position. It could also bolster its positions in some markets as an acquirer.

But one thing is clear. With Charter's new flexibility, Apollo and Zinterhofer look like major players in the evolution of cable for some time to come.