Plan Proposes Either Settlement or 'Holdback' Option to Address
Intercreditor Dispute and Enable Time Warner/Comcast Transaction to Close
by July 31
NEW YORK, April 12 /PRNewswire-FirstCall/ -- In an effort to advance
its bankruptcy case and maximize the return to its creditors, Adelphia
Communications Corporation (OTC: ADELQ) has filed a modified Fourth Amended
Joint Plan of Reorganization and Disclosure Statement Supplement that offer
a proposed solution to the dispute between certain creditor groups that has
delayed the Company's emergence from Chapter 11.
"At the direction of the Court, we have remained neutral with respect
to intercreditor disputes while staying focused on maximizing recovery for
all bankruptcy constituents," said William Schleyer, chairman and CEO of
Adelphia. "However, given that certain creditor groups have been unable to
resolve their differences despite months of negotiations and litigation, we
received permission from the Court on April 6 to propose a compromise that
would, if accepted, eliminate or reduce the risks of continued litigation
and thus help preserve the significant benefits to all creditors of the
sale transaction to Time Warner and Comcast. To maximize value of the
Adelphia estate, it is essential that we complete the sale of the Company's
assets by July 31st."
Schleyer added, "We continue to expect the transaction to close on
schedule and look forward to the cooperation of all interested parties."
Under the revised Plan of Reorganization, creditors can vote to accept
Adelphia's proposed settlement solution or opt for a "holdback" plan that
essentially postpones the dispute for future resolution while allowing the
rest of the bankruptcy case and the sale to Time Warner and Comcast to
conclude in a timely manner.
The settlement proposed in the revised Plan of Reorganization does not
reflect any determinations by Adelphia or the Court regarding the likely
outcome of the issues being litigated by the creditors, but instead
proposes a compromise among the creditors' asserted positions intended to
reduce or eliminate the risks of continued litigation.
The holdback alternative in the revised plan is subject to the risks
that the cash and Time Warner Cable stock immediately available under the
revised plan will not be sufficient to fully fund the required holdbacks,
and that any other property proposed to fund the holdbacks, such as rights
to receive future releases (if any) of reserves established by the plan or
future proceeds (if any) of litigation on behalf of the Company, will not
be approved by the Court. If the compromise is not accepted, Adelphia
intends to vigorously pursue confirmation of the holdback plan. However,
there is a risk that the holdback plan might not be confirmed.
Adelphia's revised plan reflects a 14 percent (or $710 million) decline
in its advisors' estimate of the current valuation of stock to be received
in the transaction, a decline that is less than the overall decline of
cable stocks in that period. The $12.7 billion cash component of the
transaction is unaffected; therefore, the advisors' estimate of the overall
value of the deal is only four percent lower than the prior estimate.
On April 10, 2006, the Company reached an agreement, subject to Court
approval, with an ad hoc committee representing certain holders of trade
claims against Adelphia operating subsidiaries on the terms under which
such claims holders would support Adelphia's plan of reorganization.
Copies of the modified Fourth Amended Joint Plan of Reorganization, the
related disclosure statement supplement and the trade claims agreement are
available in the investor relations and press room sections of the Adelphia
corporate web site http://www.adelphia.com.
Adelphia Communications Corporation is the fifth-largest cable
television company in the country. It serves customers in 31 states 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 Statements
This report includes forward-looking statements. All statements
regarding the Company's and its subsidiaries' and affiliates' expected
future financial position, results of operations, cash flows, sale of the
Company, settlements with the Securities and Exchange Commission (the
"SEC") and the United States Attorneys' Office for the Southern District of
New York (the "U.S. Attorney"), 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 whether the proposed sale of the Company's assets to
Time Warner NY Cable LLC and Comcast Corporation is approved and
consummated, whether the Company's modified Fourth Amended Joint Plan of
Reorganization is confirmed and consummated in time to close the sale of
such assets to Time Warner NY Cable LLC and Comcast Corporation, whether
the transactions contemplated by the proposed settlements with the SEC and
the U.S. Attorney and any other agreements needed to effect those
transactions are consummated, the Company's pending bankruptcy proceeding,
results of litigation against the Company, results and impacts of the
proposed sale of the Company's assets, the effects of government regulation
including the actions of local cable franchising authorities, the
availability of financing, actions of the Company's competitors, pricing
and availability of programming, equipment, supplies and other inputs, the
Company's ability to upgrade its broadband network, technological
developments, changes in general economic conditions, and those discussed
under Item 1A, "Risk Factors" in the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 2005 and in the Disclosure Statement
Supplement, which is posted on the Company's website, http://www.adelphia.com.
Information contained on our Internet website is not incorporated by
reference into this press release. Many of these factors are outside of the
Company's control.
SOURCE Adelphia Communications Corporation
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Related links:
http://www.adelphia.com/
http://www.prnewswire.com/comp/010150.html/
CONTACT:
Media, Paul Jacobson, +1-303-268-6426, or
Investors, Mark Spiecker, +1-303-268-6545, both of Adelphia
Communications Corporation
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