Troubled Coudersport, Pa.-based MSO Adelphia Communications Corp. said
late Monday night that its wholly owned subsidiary, Century Communications
Corp., has filed for Chapter 11 bankruptcy protection in New York.
In a prepared statement, Adelphia said it was forced to make the filing in
U.S. Bankruptcy Court for the Southern District of New York after its 50 percent
partner in the joint venture -- ML Media Partners LP, a unit of Merrill Lynch
& Co. -- threatened to foreclose on the partnership.
According to the statement, ML Media had threatened to seize control of the
partnership -- which owns systems in Puerto Rico -- and to foreclose on
Century's 50 percent interest in the venture unless Adelphia bought out its 50
percent interest for $275 million by the end of the day June 10.
Adelphia had tried but failed to obtain a temporary restraining order against
ML Media in New York State Supreme Court, which forced the bankruptcy
'We had hoped that we would not have to seek bankruptcy protection for
Century, and we took every reasonable step to resolve the situation without a
filing,' Adelphia chairman and interim CEO Erland Kailbourne said in a prepared
'With all of the critical issues facing this company, I'm deeply disappointed
in ML's action, which we believe would likely impair these valuable assets and
could prejudice other stakeholders,' he added. 'Despite our continuous,
good-faith efforts to reach an agreement with ML, it has taken actions that left
Century with no other choice but to seek the protection of the bankruptcy court
to avoid the wrongful seizure of a valuable asset.'
The Century systems have about 135,000 subscribers in a handful of cities in
Puerto Rico, including San Juan. Adelphia has been trying to sell the systems
for more than one year.
Century and ML Media purchased the properties in 1989 for about $7.8
Adelphia became 50 percent owner of the joint venture after it purchased MSO
Century Communications Corp. in 1999 for $5.2 billion in stock and assumed
Century's other systems -- with about 1.5 million
subscribers in Los Angeles and several other smaller cities -- were placed in a
separate partnership called Arahova Communications Inc. Arahova has not yet
filed for bankruptcy.
In an unrelated announcement, Adelphia said Tuesday that Peter Venetis, a
son-in-law of Adelphia cofounder John Rigas, has resigned from the board of
Venetis had been the lone Rigas-family holdout on the board, refusing to
resign after John Rigas and sons Timothy, Michael and James stepped down May