Adelphia equity committee moves to end company's exclusivity periods

By Jeff Pines

Washington, Feb. 5 - Sell off Adelphia Communications Corp.'s assets and there's billion for creditors and equity holders, the official committee of equity security holders said.

In a Feb. 5 filing with the U.S. Bankruptcy Court for the Southern District of New York, the committee asked the court to end the company's exclusivity periods for filing a reorganization plan and soliciting votes. The period for presenting a plan ends Feb. 17 and the solicitation period ends April 20.

"The cable industry has rebounded, and stock prices and valuations of similar cable companies have soared, as has Adelphia's," the committee said.

It estimates Adelphia's publicly traded securities are worth $18.705 billion as of Jan. 24. The committee estimates the company's assets could fetch $22.59 - $23.7 billion.

In addition, it notes other cable operators rate Colorado-based Adelphia's systems as acquisition targets. For example, it cites Time Warner Inc.'s chief executive officer Richard Parsons as identifying the company as a potential target.

But the time to strike is now, the committee believes because the market's view of the company's could change in a few months.

Adelphia has already received four extensions on its exclusivity periods and has left the committee out of the negotiations for developing a reorganization plan.

One thing the committee's members are certain of is the company has no intention of selling itself or its assets, but intends to emerge from Chapter 11 intact.

"The debtors have also made clear that they intend to pursue their independent future pursuant to a plan of reorganization that will provide for no distribution to Adelphia's defrauded equity security holders," the committee said. In fact, it quotes the company's chief financial officer as saying in an interview the company doesn't owe its stockholders anything.

Moreover, the company's proposed valuation grossly undervalues the company, too.

The creditors are clearly first in line, but the committee believes if the opportunity exists for its members to be made whole, the court ought to give them a shot.

The committee believes it can be ready to submit a plan within 30 days after the end of the exclusivity period.

As a matter of law, any plan that does not call for auctioning off the company's assets is not likely to pass "the best interests of the creditors' test," it noted.

A hearing was set for the motion for March 2.

Adelphia filed for Chapter 11 on June 25, 2002.

The case number is 02-41729.

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