Adelphia Communications Corp.’s reorganization plan was revealed Tuesday.
The official committee of unsecured creditors of the MSO and its subsidiaries reached a preliminary agreement among its members outlining how the company will emerge from bankruptcy as a stand-alone independent entity.
Under terms of the deal, the sales process launched by Adelphia last month will continue and, if an agreement is reached that provides greater value to unsecured creditors than a stand-alone plan, that transaction will be substituted for the stand-alone plan.
Should the MSO go the stand-alone route, all Adelphia unsecured creditors will receive common stock in the reorganized company, based upon an agreed enterprise value of $17 billion and after deducting or reserving payments to bank lenders and other senior creditors.
The term sheet released by the committee also provides for the compromise and settlement of inter-creditor disputes among unsecured creditors, and for the continuation of litigation against, among others, the Rigas family, Adelphia's auditors and its co-borrowing lenders.
“We are pleased that the unsecured creditors committee has made progress, and we view this as a productive step,” Adelphia said in a prepared statement.
“As we move forward with our dual-track process of simultaneously pursuing a sale of the company and an emergence from bankruptcy as a stand-alone company, we will evaluate these proposed amendments, as well as input from other constituents,” the company added. “We remain committed to achieving maximum value for all of the bankruptcy constituents.”
Regarding the MSO’s potential sale, Adelphia said, “Our sale process for the company is robust. Due to the high number of interested parties and the time required for those parties to conduct due diligence, final offers are expected in January.”