Adelphia Dangles $725m to Wriggle Off SEC Fraud Hook

29 March 2005

Such is the Alice in Wonderland world of US insolvency law that fraud-beset cable group Adelphia Communications, currently under Chapter 11 bankruptcy protection, can dredge-up a cool $725 million (€559.67m; £388.03m) to pay off the Securities and Exchange Commission.

The payment, which is intended to remove the final legal barrier to the group's exit from bankruptcy, is in restitution for criminal acts committed by its former management - for which the perpetrators have been convicted and await sentence.

But the offer, filed with the SEC last week, stresses it is "subject to various terms and conditions. Settlement negotiations between the government and the company are continuing."

Assuming its acceptance by the SEC, the Adelphia settlement will be the second largest in US history - exceeded only by that of the former WorldCom (now MCI) which shelled out $750m.

Pending emergence from Chapter 11, Adelphia's creditors have put the group up for auction, with a $17 billion cash and shares joint offer by cable rivals Time Warner and Comcast leading the pack.

Data sourced from Financial Times Online; additional content by WARC staff