Report: Sirius, Liberty Media near deal

Pact would save sat radio company from bankruptcy

Liberty Media is near a deal to buy a major stake in Sirius XM Radio that would save the satellite radio company from bankruptcy, Dow Jones reported Monday.

Meanwhile, a group of Sirius creditors will seek to remove chief executive Mel Karmazin if the company chooses a bankruptcy filing over a deal with an investor that would let it stay solvent, the Wall Street Journal said.

"Creditors will act quickly and definitively if they perceive that management is (not) acting ... in the best interest of the estate," the paper quoted Edward Weisfelner, a partner with Brown Rudnick Llp. -- the law firm representing the creditor group -- as saying.

"The management of Sirius XM is continually working to ensure the best possible outcome for the enterprise," a spokesman for Sirius said.

Sources told Reuters last week that Liberty Media was talking to Sirius about a plan to invest in the satellite radio company but not take it over. The timing of an agreement was unclear.

The talks with Liberty are seen as a last-ditch attempt by Karmazin to hold off EchoStar, which holds $175 million in Sirius convertible bonds due Tuesday.

Sirius said it had refinanced some debt that was due in December but added that it still might have to file for Chapter 11 bankruptcy protection if talks toward refinancing other debt did not yield results by Tuesday.