Adelphia gets $8.8 billion loan

Adelphia Communications Corp., the bankrupt cable television company whose former leaders are on trial for fraud, on Wednesday said it set $8.8 billion in new financing — the largest ever for a bankrupt company -- as part of a plan to emerge from bankruptcy later this year.

Adelphia, which submitted the reorganization plan to the U.S. Bankruptcy Court for the Southern District of New York, said its proposal includes a variety of distributions in cash, preferred shares and common stock as well as interests in a litigation trust for its various creditors, shareholders and litigants.

Adelphia said the $8.8 billion exit financing was led by J.P. Morgan Chase & Co., Citigroup Inc., Credit Suisse First Boston and Deutsche Bank.

“This reflects a high degree of confidence in the company’s future and allows us to emerge with a strong balance sheet,” said Vanessa Wittman, chief financial officer, on a conference call to reporters.

The Rigas family, the company founders whose fraud trial began earlier this week, will receive no payments from their equity stakes and other claims, said Adelphia, the No. 5 U.S. cable operator with more than 5 million customers in 30 states and Puerto Rico.

The plan’s filing is expected to touch off battle between Adelphia’s new management, appointed after the Rigas family resigned amid fraud charges, and Adelphia’s shareholders, who charge that the plan will enrich creditors and bondholders at their expense.

The plan provides slim prospects for recovery for shareholders, allowing them to participate in a litigation trust to pursue claims against the Rigas family, Adelphia’s former auditor Deloitte & Touche, and the financial institutions  that lent money to the company and the family. Such litigation is expected to go on for years.

Adelphia founder John Rigas, his sons Timothy and Michael, and Adelphia’s former director of internal reporting, Michael Mulcahey, are on trial in U.S. District Court in Manhattan on charges they stole millions from the company by taking out co-borrowing loans for personal business and to cover margin calls on Adelphia stock.

For Subscribers

FOR SUBSCRIBERSCBP leaders cut out of Trump ad buy decision

FOR SUBSCRIBERSAmerican passenger drafted goodbye texts to her family as Flydubai plane plummeted

FOR SUBSCRIBERSCornell rape allegation pushes embattled New York prosecutor into national spotlight

FOR SUBSCRIBERSAbdul El-Sayed tries to woo MAHA voters as Democrats seek inroads with RFK’s supporters

FOR SUBSCRIBERSKratom-like substances are popping up in a typically benign supplement

FOR SUBSCRIBERSGOP super PAC increases its spending for Sen. Jon Husted in tough Ohio race

FOR SUBSCRIBERSRecords reveal tumultuous marriage between slain New York Times executive and wife

FOR SUBSCRIBERSFrom clean energy warrior to ‘wall of shame,’ James Talarico reverses on a fossil fuel money pledge

FOR SUBSCRIBERSCongressional staff planned official trip with luxury stops in Italy and France weeks before election

FOR SUBSCRIBERSA harrowing ordeal aboard an Israel-bound plane

FOR SUBSCRIBERSOpenAI CEO Sam Altman to skip congressional hearing on rogue AI agents

FOR SUBSCRIBERSKey DOJ lawyers departed Trump ‘grand conspiracy’ probe amid pressure to produce, source says

FOR SUBSCRIBERSTrump’s new AI chatbot often links to a site launched under Clinton 26 years ago

FOR SUBSCRIBERSAt MAHA summit, industry CEOs the movement once vilified take the stage

FOR SUBSCRIBERSThis Paralympian has two goals: Win medals and give away $500,000 to her teammates

For Subscribers

FOR SUBSCRIBERSCBP leaders cut out of Trump ad buy decision

FOR SUBSCRIBERSAmerican passenger drafted goodbye texts to her family as Flydubai plane plummeted

FOR SUBSCRIBERSCornell rape allegation pushes embattled New York prosecutor into national spotlight

FOR SUBSCRIBERSAbdul El-Sayed tries to woo MAHA voters as Democrats seek inroads with RFK’s supporters

FOR SUBSCRIBERSKratom-like substances are popping up in a typically benign supplement

FOR SUBSCRIBERSGOP super PAC increases its spending for Sen. Jon Husted in tough Ohio race

FOR SUBSCRIBERSRecords reveal tumultuous marriage between slain New York Times executive and wife

FOR SUBSCRIBERSFrom clean energy warrior to ‘wall of shame,’ James Talarico reverses on a fossil fuel money pledge

FOR SUBSCRIBERSCongressional staff planned official trip with luxury stops in Italy and France weeks before election

FOR SUBSCRIBERSA harrowing ordeal aboard an Israel-bound plane

FOR SUBSCRIBERSOpenAI CEO Sam Altman to skip congressional hearing on rogue AI agents

FOR SUBSCRIBERSKey DOJ lawyers departed Trump ‘grand conspiracy’ probe amid pressure to produce, source says

FOR SUBSCRIBERSTrump’s new AI chatbot often links to a site launched under Clinton 26 years ago

FOR SUBSCRIBERSAt MAHA summit, industry CEOs the movement once vilified take the stage

FOR SUBSCRIBERSThis Paralympian has two goals: Win medals and give away $500,000 to her teammates

The proposed reorganization plan values Adelphia at $17 billion, compared with about $23 billion estimated by the shareholders, who have asked the court for permission to file their own plan that would sell the company.

Chief Executive William Schleyer said its valuation was based on estimates complied by its investment banking adviser Lazard, based on comparable public market valuations and other measurements. He declined further comment on the valuation, citing pending litigation with shareholders.

Adelphia’s court-appointed equity committee, in a statement, denounced the plan, saying management “continues to grossly undervalue” the enterprise and that a sale would allow the company “to make a multi-billion dollar distribution to existing shareholders.”

The current management has said they plan to operate Adelphia as a stand-alone company when it emerges from bankruptcy. A committee representing the equity holders has said it would like the company sold off to recover some of their investment.

Upon emergence from Chapter 11, Adelphia estimates it would have approximately $8 billion in debt and an additional $750 million revolving credit facility.