Judge Won’t Throw Out Adelphia Settlement

Author:
Publish date:
Updated on

A bid by creditors of Adelphia Communications Corp. to throw out a $715 million settlement to compensate investors who lost money in the bankrupt MSO’s collapse in 2002 was rejected by a federal judge in Manhattan Thursday, Reuters reported.

Bankruptcy Judge Robert Gerber initially rejected the creditor's efforts to throw out the settlement, but the unsecured creditors -- which balked at the prospect of shareholders being paid ahead of them -- appealed, according to Reuters.

In his Thursday ruling, U.S. District Court Judge Lewis Kaplan wrote that he agreed with Gerber’s decision, rejecting the creditors' claims that the government had forced Adelphia into settling, Reuters reported.

“What the appellants characterize as coercion was no different in principle than the pressure that leads the overwhelming majority of defendants in criminal cases to plead guilty -- the risk that a conviction after trial will result in a harsher sentence than is likely to be imposed following a guilty plea," Kaplan wrote, according to Reuters.

Related