Adelphia Seeks to Separate Sale, Reorganization Plans

May 26, 2006  •  Post A Comment

Adelphia Communications said Friday that it asked a judge to allow the bankrupt cable company to sell its assets to Time Warner Cable and Comcast, even if its bankruptcy reorganization plan hasn’t been first confirmed by a court.

The move comes as creditors remain at an impasse about how to distribute the proceeds of the $17.6 billion acquisition of Adelphia by Time Warner Cable and Comcast. That inability to reach an agreement puts the acquisition in danger of being tabled. The deal must be completed by July 31 or Adelphia could be forced to pay a fee of more than $400 million to the buyers.

“Despite our best efforts, the creditors’ disputes remain unresolved,” Adelphia Chairman and CEO William Schleyer said in a statement issued Friday. “Removing the requirement for a confirmed plan of reorganization for Adelphia greatly increases the odds of Adelphia’s sale closing in a timely matter.

Under the new proposal, the bankruptcy proceedings would be unlinked from the sale process in order to allow the sale to meet the July 31 deadline.

Adelphia said it expects a hearing to be held on its proposal on or around June 8. A hearing to approve the sale and the company’s bankruptcy reorganization plan is expected to take place around June 27.