As predicted by a legion of media and investment seers, debt-beset Adelphia Communications finally filed late Tuesday for Chapter 11 bankruptcy-court protection.
The long-awaited move, made one day after Adelphia secured $1.5 billion (€1.51bn; £0.98bn) in interim financing from a consortium of banks, completes a three month roller-coaster ride which took America’s sixth-largest cable operation to bankruptcy via boardroom battling and the onset of federal criminal and regulator investigations.
The finance deal gives Adelphia $500,000 upfront, the balance being conditional on its submission of an acceptable business plan to the participating banks – among them J P Morgan Chase and Citigroup.
According to the group’s chairman and interim ceo Erland E Kailbourne, the Chapter 11 filing will “stabilize Adelphia's financial foundation and [enable it to] continue quality service to our customers.” It would also, he added, “enable us to fully evaluate our enterprise without the immediate pressure to sell valuable assets that may well benefit the company in the future.”
Subject to court approval, employees will continue to be paid wages and health and welfare benefits, while Adelphia’s businesses "will continue operations, and local franchise authorities, programming suppliers and other vendors will continue to be paid in the normal course of business.”
Data sourced from: The Wall Street Journal Online; additional content by WARC staff