June 1 (Bloomberg) -- Paul Allen, the Microsoft Corp. co- founder and Charter Communications Inc. chairman, was sued by a shareholder of the bankrupt cable-TV provider who claims Allen and two other executives committed securities fraud.

Stockholder Herb Lair, an Arkansas resident, accused Allen, Chief Executive Office Neil Smit and Chief Financial Officer Eloise Schmitz of making misleading public statements about the company’s prospects before its bankruptcy filing.

Because of those statements, “Charter’s stock traded at artificially high prices” between October 2006 and February 2009, Lair said in his complaint filed today in federal court in Little Rock, Arkansas.

Lair seeks class-action, or group, status for the case, plus unspecified money damages.

Charter, the fourth-largest U.S. cable-TV operator, filed for bankruptcy protection in New York on March 27. A reorganization plan in which it would reinstate $11.8 billion in debt has been opposed by Wells Fargo & Co. because it doesn’t account for risks involving a change in control. Allen, who is Charter’s controlling shareholder, would give up control of the St. Louis-based company under the plan.

Charter spokeswoman Anita Lamont said the company hasn’t yet seen Lair’s complaint and declined to comment.

The securities suit is Lair v. Allen, 09cv405, Eastern District of Arkansas (Little Rock). The bankruptcy case is In re Charter Communications Inc., 09-11435, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Andrew M. Harris in Chicago at aharris16@bloomberg.net.

Last Updated: June 1, 2009 19:23 EDT