Adelphia Ups Creditor Ante


Adelphia Communications Corp. filed a second amended plan of reorganization June 25, a proposal that will sweeten the pot available to creditors as it moves forward in the sale of its cable assets to Time Warner Inc. and Comcast Corp.

In the document, filed with the U.S. Bankruptcy Court for the Southern District of New York, Adelphia proposed paying creditors about $9.5 billion in cash and stock, a slight rise from the $9.2 billion the company said it would return to creditors prior to the Time Warner/Comcast deal.

The reorganization plans still needs court approval and a disclosure hearing is expected later this summer. That will be followed by creditor balloting and a confirmation hearing to approve a final plan of reorganization.

The new confirmation plan is the first to be submitted after Adelphia decided to sell its cable assets to Time Warner and Comcast for $17.6 billion in cash and stock in a new entity, Time Warner Cable Inc. That deal, announced in April, is expected to close by the first quarter of 2006.

Creditors would receive a mix of cash and stock in Time Warner Cable as part of the new reorganization plan with holders of Adelphia’s secured debt — mostly banks — receiving all cash.

Adelphia would shell out about $9.3 billion in cash to creditors, while doling out about $200 million in Time Warner cable stock. Still to be determined are the amounts to be paid to unsecured creditors — including holders of its senior notes, owed $5.1 billion.

Adelphia said that once those amounts are determined, those creditors will likely be paid in Time Warner Cable stock.