Creditors Value Bankrupt Adelphia at $17bn

11 November 2004

Cynics among media observers will see the above headline as evidence that the value of the US dollar has finally reached rock bottom.

Or that frustration among creditors has driven them to seek comfort in wild humour.

But in the wild and wonderful world of high finance, they don't joke about money. The assets of fraud-ridden and bankrupt Adelphia - America's fifth largest cable operator - have been valued by its creditors at a cool $17 billion (€13.15bn; £9.14bn) in a reorganisation plan that will serve as a benchmark for the company's upcoming auction

In January the group expects to receive final bids for its assets, which it has split into seven separate geographical clusters. Should the bids, either for the whole of the company or its constituent parts, fail to match that valuation (inclusive of debt), all bids will be void and a standalone plan activated.

The plan will give all unsecured creditors shares in the new company when it emerges from Chapter 11 bankruptcy protection. In addition, all recovery lawsuits will be allowed to continue, including Adelphia's $3.2bn complaint against members of the founding Rigas family.

In July, the group's founding patriarch John Rigas (79) and his son Timothy were convicted of fraud and conspiracy.

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