Major Bankruptcy Milestone; Subject to Court Approval; Ch. 11 Emergence
Intended in Fourth Quarter 2006
Anticipated July 31 Closing Date for Sale of Adelphia Assets Not Affected
GREENWOOD VILLAGE, Colo., July 24 /PRNewswire-FirstCall/ -- In a major
step forward in its four-year bankruptcy case, Adelphia Communications
Corporation (OTC: ADELQ) and Committees representing most of the Company's
major bondholders and trade creditors, including the Official Committee of
Unsecured Creditors, as well as significant individual creditors have
agreed upon the framework for a plan of reorganization intended to result
in a fourth quarter 2006 emergence from Chapter 11 bankruptcy. The
agreement, reached on Friday, July 21, enjoys widespread support among
Adelphia's major unsecured creditors, but several major constituencies
including the pre-petition bank lenders and certain bondholders have not
signed the agreement. The Company's obligations under the agreement and the
reorganization plan envisioned by the agreement are subject to approval by
the U.S. Bankruptcy Court for the Southern District of New York.
"This agreement will help pave the way toward a new, modified Plan of
Reorganization that will be subject to court approval, and we're pleased
that after lengthy negotiations a significant majority of our unsecured
creditors are satisfied with the outcome and supportive of this
settlement," said Bill Schleyer, chairman and CEO of Adelphia. "In
addition, we're thankful for the role Court-appointed Monitor Judge Cecilia
Morris played in bringing these parties together," added Schleyer. "Our
intention now is to seek a resolution of outstanding differences with the
holders of bank and other claims and emerge from bankruptcy sometime in the
fourth quarter of 2006."
The agreement reflects a compromise among several important creditor
groups under which approximately $1.08 billion in value will be transferred
from certain unsecured creditors of various Adelphia subsidiaries to
certain unsecured senior and trade creditors of the Adelphia Communications
parent corporation, subject, in some cases, to reimbursement from
contingent sources of value, including the proceeds of a litigation trust
to be established under the plan to pursue claims against third-parties
that are alleged to have damaged Adelphia. The plan outlined in the
agreement is conditioned on, among other things, the closing of the
anticipated sale of substantially all of the Company's assets to Time
Warner and Comcast. Adelphia intends to soon file a revised Plan of
Reorganization and accompanying Disclosure Statement with the bankruptcy
court embodying the terms of the agreement.
The expected July 31, 2006 closing date for the sale of Adelphia's
assets and joint venture interests to Time Warner Cable and Comcast remains
in effect.
A copy of the Agreement is being filed today with the Securities and
Exchange Commission (SEC) as an exhibit to a Form 8-K.
Until now, disputes among creditors over how to distribute proceeds
from the sale to Time Warner Cable and Comcast have delayed resolution of
the Adelphia Bankruptcy case, which was filed in June 2002 and is one of
the largest and most complex in U.S. history.
About Adelphia
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 press release 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 Attorney's 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 ("TW NY") and Comcast Corporation ("Comcast") is
consummated, whether the Third Modified Fourth Amended Joint Plan of
Reorganization Under Chapter 11 of the Bankruptcy Code for Century-TCI
Debtors and Parnassos Debtors, as Confirmed, dated as of June 28, 2006,
will be consummated in time to close the sale of assets to TW NY and
Comcast, the potential costs and impacts of the transactions and
obligations associated with the sale of substantially all of the
consolidated assets of the Company to TW NY and Comcast, whether the
transactions contemplated by the 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 Items 1A, "Risk
Factors," in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2005 and Quarterly Report on Form 10-Q for the period
ended March 31, 2006 and in the Company's Fourth Amended Disclosure
Statement, filed with the Bankruptcy Court on April 28, 2006, which is
available in the investor relations section of the Company's website at
http://www.adelphia.com. Information contained on the Company's 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
Investor Relations, Mark Spiecker, +1-303-268-6545, both of
Adelphia Communications Corporation
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