The Adelphia Communications saga increasingly resembles a Greek tragedy far removed from the semantic origins (‘brotherly love’) of the US city from which the embattled cable TV group derives its name.
Despite the recent outbreak of acrimony [WAMN: 3-Jun-02], relations between two of the principal antagonists – Adelphia chairman/interim ceo Erland E Kailbourne and agressive investor Leonard Tow – appear to have assumed an unexpected cordiality.
The hitherto hostile pair last week waged war by press statement. But there was no blood on the boardroom carpet when they finally confronted each other at Saturday’s several-hour directors meeting in Manhattan. Indeed, such was the effusion of brotherly love that Tow and one other unnamed person - thought to be an associate - were elected to Adelphia’s board.
Tow’s appointment, although opposed in some quarters, was a foregone conclusion given that he and his family control twelve percent of Adelphia’s stock – sufficient to appoint two directors. According to leakages, the weekend meeting agreed to pursue “all available options” including the sale of assets and filing for bankruptcy protection.
Which appears to be a different song to that trilled by Tow last week when he publicly condemned the proposed sale of “valuable” cable assets by Adelphia in what he claimed was an “atmosphere of desperation.” According to insiders, he will now consider an asset sale if it presents the right value and opportunity for the company.
As to a bankruptcy filing, this could be Hobson’s Choice for Adelphia, several of whose subsidiaries have defaulted in bank loans because the group failed to file timely financial statements with the Securities and Exchange Commission. This 'oversight' allows creditors to “accelerate the maturity of their debt,” thereby forcing Adelphia to repay the borrowings sooner.
Data sourced from: The Wall Street Journal Online; additional content by WARC staff