Adelphia CLEC Plan Approved3/24/2004 9:46 AM Eastern
A U.S. Bankruptcy Court judge approved a $1.9 billion settlement agreement between Adelphia Communications Corp. and its former competitive-local-exchange-carrier subsidiary that will allow the CLEC to emerge from bankruptcy more quickly.
Judge Robert Gerber approved the plan between Adelphia and Adelphia Business Solutions Inc. (doing business as TelCove Inc.) Tuesday.
The plan calls for Adelphia to transfer about $62 million in cash to Adelphia Business and to move some CLEC markets to the company.
Adelphia also agreed to purchase up to $39 million in services from Adelphia Business over the next five years.
Adelphia Business will drop more than $1 billion in claims against the MSO, and Adelphia will drop an $842 million lawsuit against the CLEC.
This positions Adelphia Business to emerge from bankruptcy with new owners. According to documents, Bay Harbour Management LLC -- which owned Adelphia bonds -- will own one-half of the equity in the company. Other unsecured creditors will own the other half of the company but have the option of choosing either cash or stock.