Adelphia Communications Corp., which agreed to sell most of its assets to Time Warner Inc. and Comcast Corp., will pay more than $9 billion in cash to creditors under a revised bankruptcy reorganization plan, court papers show.
Some creditors of the No. 5 U.S. cable TV operator will also receive Time Warner shares, according to the papers, which were filed with the U.S. Bankruptcy Court in Manhattan.
Adelphia filed its amended plan Saturday, three years to the day after seeking Chapter 11 protection from creditors.
“Maximizing value for our bankruptcy constituents has remained our most important goal,” Chief Executive Bill Schleyer said in a statement.
Adelphia said it still expects “significant negotiations” with creditors regarding its reorganization.
The plan is the first that Greenwood Village, Colorado-based Adelphia filed since it agreed on April 21 to the $17.6 billion asset sale to Comcast and Time Warner, the No. 1 and No. 2 U.S. cable TV operators, respectively.
Adelphia’s bankruptcy is the ninth-largest in U.S. history, according to BankruptcyData.com. The company was based in Coudersport, Pennsylvania, when the Rigases were in control.
Last Monday, Adelphia’s 80-year-old founder John Rigas was sentenced to 15 years in prison, while his son Timothy, Adelphia’s former finance chief, was sentenced to 20 years, after being convicted of looting the company.
The Rigases were found guilty last July of bank fraud, securities fraud and conspiracy. Prosecutors said the family siphoned millions of dollars for its personal use, and overstated Adelphia’s financial results. Appeals are expected.
Under the amended plan, holders of secured claims would be repaid in full, as would holders of Adelphia’s FrontierVision notes, who have made $544 million of claims.
Holders of unsecured Adelphia debt, who have filed more than $5.1 billion of claims, would receive an undisclosed number of Time Warner shares.
The Rigas family would get nothing.
Adelphia hopes by the end of the summer to seek court approval for its disclosure statement, permitting creditors to vote on its Chapter 11 plan. About two-thirds of creditors must vote for the plan, and a confirmation hearing would follow.
