A U.S. Bankruptcy Court has again put off hearing arguments from
municipalities that believe they should be considered unsecured creditors of
bankrupt MSO Adelphia Communications Corp.
The cities have asked the Bankruptcy Court for the Southern District of New
York for the right to form a committee -- separate from the unsecured creditors'
committee -- to represent all of Adelphia's local franchisers.
Because the law considers localities to be entities, and not persons, they
are not represented on the creditors' committee.
The cities' previously petitioned case trustee Carolyn Schwartz with their
request, but it was denied. The current unsecured creditors' committee
represents the cities' interests, she wrote.
Schwartz also contended that the bankruptcy hasn't hurt the municipalities,
noting that one of the court's first actions was to allow Adelphia to make good
on its franchise-fee obligations to cities with checks from the MSO that had
But city officials said that since that opinion was issued, some
municipalities have been told that Adelphia will not pay some of its public,
educational and governmental channel commitments. Attorneys for the National
Association of Telecommunications Officers and Advisors will note that shortfall
when they again argue for standing, this time before the court.
A hearing on that argument has been postponed for the third time, said Matt
Leibowitz, one of the attorneys representing the municipalities. It was first
set for Oct. 9, then for the week of Oct. 21.
Arguments have now been set for Nov. 7, and lawyers were told the
city-standing issue is the only one on the docket.