Chapter 11 for Adelphia CLEC Unit3/27/2002 2:49 AM Eastern
Adelphia Business Solutions Inc. (ABIZ), the troubled
competitive-local-exchange-carrier subsidiary of Adelphia Communications Corp.,
filed for Chapter 11 bankruptcy protection Wednesday in U.S. Bankruptcy Court
for the Southern District of New York, the company said in a press release.
In conjunction with the filing, ABIZ said it has reached an agreement with
Adelphia and an affiliate of the Rigas family -- Adelphia's largest shareholders
-- to provide it with up to $135 million in debtor-in-possession financing.
The DIP financing -- which will give ABIZ the money to continue operations,
including paying for inventory shipments and employee wages -- must be approved
by the bankruptcy court.
ABIZ said it is also negotiating with holders of its 12 percent and 14
percent senior notes regarding their claims. Earlier this month, the unit said
it would not be able to make interest payments of about $15.3 million that are
due March 29.
Adelphia spun off ABIZ as a separate company Jan. 14.
In the press release, ABIZ said it believed the Chapter 11 filing was
necessary given the 'virtual shutdown of the telecommunications capital markets
and the decline in the telecommunications industry generally.'
ABIZ stock, which had traded as high as $67.50 per share in 2000, closed at 9