As part of an agreement with debt holders, they will be paid in full and Paul Allen will maintain the largest voting interest in the company.
The agreement says shareholders' stake in the company will be canceled.
The company says the agreement will reduce debt by about $8 billion.
Chief Executive Neil Smit says the St. Louis-based company's cable, Internet and telephone operations will continue throughout the debt restructuring process.
The agreement requires two subsidiaries to make interest payments of $74 million that were due Jan. 15.