Filing Caps Year of Progress and Change at Adelphia As It Prepares
to Operate Independently Upon Emergence
GREENWOOD VILLAGE, Colo., Feb. 25 /PRNewswire-FirstCall/ -- Adelphia
Communications Corporation ("Adelphia") (OTC: ADELQ) and certain of its
subsidiaries today filed their proposed joint plan of reorganization and
related draft disclosure statement with the U.S. Bankruptcy Court for the
Southern District of New York.
"Adelphia's proposed plan of reorganization is the product of relentless
effort and reflects the dedication of Adelphia's management and bankruptcy
teams, and our almost 15,000 employees in 30 states and Puerto Rico who are
helping to make Adelphia a better company," said William Schleyer, chairman
and CEO of Adelphia. "In the past year Adelphia has made great strides in its
operations and performance -- and hard work has brought us to this point.
Now, we look forward to working with our stakeholders and the court to make
this plan a reality and move Adelphia out of Chapter 11 and into a new era of
growth and independence."
Details of the Proposed Plan of Reorganization
The proposed plan is based on an estimated $17 billion valuation of
Adelphia excluding minority interests. Upon emergence from Chapter 11,
Adelphia estimates it will have approximately $8 billion in indebtedness and
have access to an additional $750 million revolving credit facility. In
addition, it is contemplated that reorganized Adelphia will issue preferred
securities and publicly-traded common stock.
Within Adelphia's proposed Plan of Reorganization, there are multiple
classes of creditors and equity holders. Recoveries for those classes will
vary. A description of the classes and their treatment is contained in the
draft disclosure statement filed with the bankruptcy court.
The proposed reorganization plan provides for the following recoveries:
-- Full payment in cash to the debtor-in-possession lenders.
-- Full payment in cash to pre-petition bank lenders subject to pending
litigation.
-- Full payment in a new preferred security to certain Adelphia joint
venture partners in exchange for their existing joint venture
interests.
-- Distributions of common stock and/or in certain cases interests in a
litigation trust established under the proposed Plan of Reorganization
to holders of unsecured claims against Adelphia and its subsidiaries.
The percentage recovery to the classes will vary based on legal entity
and legal entitlement as follows:
-- Full payment in common stock of reorganized Adelphia to the
holders of unsecured claims against Adelphia's subsidiaries.
-- Partial payment in common stock of reorganized Adelphia to the
holders of senior claims against the Adelphia parent company,
who will also receive interests in the litigation trust.
-- Interests in the litigation trust for holders of subordinated debt
claims, Adelphia preferred stock, Adelphia common stock, and
securities law claimants. (See description below.)
-- No payments will be made with respect to claims and equity interests
of the Rigas family.
-- Creation of a "convenience class" for creditors with smaller claims
who will receive payment in cash.
The litigation trust will have the right to pursue claims against certain
third parties to the extent those claims are not resolved prior to emergence
from bankruptcy or as part of the reorganization plan, including claims
against Deloitte & Touche, the Rigas family and financial institutions
involved in the co-borrowing litigation. For any recoveries, each class with
interest in the litigation trust will receive an interest in order of their
respective priority positions established under the bankruptcy code; junior
classes will receive no recovery from the litigation trust until classes
senior to them are paid in full.
Please note that this press release is only a summary and is based on
Adelphia's current estimate of the amount of claims that will be allowed by
the bankruptcy court. Stakeholders of Adelphia are urged to read the proposed
plan of reorganization and the draft disclosure statement as well as any
amendments or supplements to those documents for details on the planned
distributions and other items that will affect them. A copy of the company's
proposed plan of reorganization and the accompanying draft disclosure
statement is available on the Adelphia Web site at http://www.adelphia.com .
Conference Call
Adelphia will hold a conference call for investors and analysts on
Wednesday, February 25, 2004 at 10:45 AM ET/7:45 AM PT to discuss the Plan of
Reorganization and the $8.8 billion exit financing package announced
separately today.
The conference call will be webcast live in a listen-only mode and can be
accessed at
http://www.genesyseventservice.com:80/Attendees/default.asp?rid=401765 .
Participants should go to the call link no later than 10 minutes before the
start of the call in order to register. The call will be archived at the same
Web address and will be available for playback three hours after recording.
Those who wish to participate in the conference call should dial
888-689-8463 or 703-708-0667 no later than 10 minutes before the start of the
call. Ask the operator for the Adelphia Investor Relations call.
A replay of the call will be available at 703-925-2533 or 888-266-2081
starting at 1:45 PM ET and will be available until March 10, 2004. The replay
requires the access code 401765.
Reorganization Process
On June 25, 2002, Adelphia and substantially all of its Debtor
subsidiaries filed voluntary petitions for relief under Chapter 11 of the
Bankruptcy Code. Adelphia remains in possession of its assets and properties
and continues to operate its businesses and manage its properties as a debtor-
in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.
In the past year, Adelphia has maintained a continuity of service and
taken a number of actions intended to strengthen its business operations and
enhance its financial performance. "It would be an understatement to say it's
been a year of change at Adelphia," said Schleyer. "We moved the headquarters
to Denver and built a new, seasoned management team while creating an
independent and highly-respected Board of Directors with deep expertise in
corporate governance, finance and the cable industry. We've repackaged our
products, upgraded our network and launched new advanced services while
decentralizing our management, improving customer service and repairing
relations with local franchising authorities, all while managing a complex
bankruptcy. Looking ahead, if this proposed plan is approved we intend to use
our strong balance sheet and core assets to grow an independent Adelphia and
fulfill our mission of becoming a broadband industry leader."
Confirmation and ultimate consummation of the plan of reorganization is
subject to a number of conditions, which include approval of the plan by
various classes of holders of claims against or equity interests in Adelphia
and by the bankruptcy court. To the extent necessary, Adelphia will seek to
confirm its plan over the objections of dissenting classes by invoking
provisions of the bankruptcy code that allow the court to impose a settlement.
Confirmation and ultimate consummation are also contingent on the ability of
Adelphia to secure exit financing. Many of these conditions are outside of
the control of Adelphia, and there can be no assurance as to whether, or on
what terms, the plan will ultimately be consummated.
Bankruptcy law does not permit solicitation of acceptances of the plan
until the court approves a disclosure statement relating to the proposed plan.
Accordingly, this announcement is not intended to be, nor should it be
construed as, a solicitation for a vote on the plan.
About Adelphia
Adelphia Communications Corporation is the fifth-largest cable television
company in the country. It serves customers in 30 states and Puerto Rico, and
offers analog and digital video services, high-speed Internet access and other
advanced services over Adelphia's broadband networks.
Cautionary Statement Regarding Forward-Looking Information
This document includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements regarding
Adelphia Communications Corporation's and its subsidiaries' and affiliates'
(collectively, the "Company") expected future financial position, results of
operations, cash flows, restructuring and financing plans, expected emergence
from bankruptcy, business strategy, budgets, projected costs, capital
expenditures, network upgrades, products and services, competitive positions,
growth opportunities, plans and objectives of management for future
operations, as well as statements that include words such as "anticipate,"
"if," "believe," "plan," "estimate," "expect," "intend," "may," "could,"
"should," "will," and other similar expressions are forward-looking
statements. Such forward-looking statements are inherently uncertain, and
readers must recognize that actual results may differ materially from the
Company's expectations. The Company does not undertake a duty to update such
forward-looking statements. Factors that may cause actual results to differ
materially from those in the forward-looking statements include the Company's
pending bankruptcy proceeding, results of litigation against the Company and
government investigations of the Company, the effects of government regulation
including the actions of local cable franchising authorities, the availability
of financing, actions of the Company's competitors, customer response to
repackaged services, pricing and availability of programming, equipment,
supplies, and other inputs, the Company's ability to upgrade its network,
technological developments, and changes in general economic conditions. Many
of these factors are outside of the Company's control.
SOURCE Adelphia Communications Corporation
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Related links:
http://www.adelphiacom.com
CONTACT:
media, Paul Jacobson, +1-303-268-6426, or
Erica Stull, +1-303-268-6502, or investor relations, Jim Buckley,
+1-303-268-6424, all of Adelphia Communications Corporation
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