NASDAQ said Thursday night that it will delist Adelphia Communications Corp.
Monday, June 3.
The delisting will likely force Adelphia into bankruptcy, since its
bondholders can demand that the MSO convert $1.4 billion in debt into cash --
money Adelphia doesn't have.
Word of the delisting came at the end of a day that saw dissident shareholder
Leonard Tow battle with Adelphia interim CEO Erkie Kailbourne over the MSO's
attempts to dump some of its cable systems.
Tow also proposed to Adelphia board member Leslie Gelber that Tow be
appointed chairman of the board, according to a letter Kailbourne sent to Tow.
In a letter filed with the Securities and Exchange Commission, Tow said he had heard that Adelphia was in talks
to sell one of its "most valuable cable properties" and that management was
under directions to complete the sale by Friday evening.
Although Tow didn't name the assets, several published reports this week said
Adelphia was in intense negotiations with Charter Communications Inc. chairman Paul Allen to
sell about 450,000 subscribers in Los Angeles -- as well as another 550,000 customers in
Georgia, South Carolina and North Carolina -- for between $3.5 billion and $4
"Such a sale would strip the company of its ability to conduct an orderly and
profitable disposition of the remainder of the company's cable assets when and
if it is necessary," Tow wrote in the letter to Kailbourne. "Because of the
complexities of Adelphia's financial structure, sales of assets without careful
planning as to the availability of proceeds could have an unfair impact on
Kailbourne responded that Tow's letter was the "first indication" that Tow
wanted more information about the planned asset sales before a board meeting scheduled for Saturday.
"In light of your objection to the planned asset sales, I would ask you to
provide me, in as much detail as you are now able, what specific, concrete
alternative or alternatives you propose. You will, I know, understand that
general ideas without concrete details as to how they will be implemented are of
little use at this time," Kailbourne wrote.
The wrangling over whether Adelphia should sell systems in order to raise
cash and reduce its debt may now be irrelevant, considering that the NASDAQ
delisting may trigger a bankruptcy filing.