New York – A bankruptcy judge today granted Greenwood Village-based Adelphia Communications Corp. permission to sell its assets to Time Warner Corp. and Comcast Corp. in an estimated $17 billion deal.
Judge Robert Gerber of the Southern District of New York said he would approve an order to be submitted later today to detach the asset sale from the rest of Adelphia’s bankruptcy process, allowing it to be executed without the approval of an overall restructuring plan. Adelphia sought the separation to bypass creditor disputes that have slowed the company in its filing of its plan.
The sale agreement with Time Warner and Comcast had been put in jeopardy because of a July 31 deadline at which the buyers could retract their offer. The offer includes a $12.7 billion cash component and the rest as shares in Time Warner. Once complete, the acquisitions would secure Time Warner’s and Comcast’s status as the two biggest cable operators in the nation.
Adelphia first announced the deal in April 2005 and had been trying to close it ahead of deadline.
“A good business opportunity is available so long as the parties act quickly,” the judge read from the order during today’s hearing. “In such cases, the bankruptcy process should not straitjacket (the judge) to do what is best for the estate.” The judge said the sale’s approval was not a reason for self-congratulation or rest given pending disagreements with creditors over how to distribute proceeds from the sale. The court had a hearing planned for Wednesday morning and a chamber’s conference scheduled for Thursday.
“The sale represents an extraordinary achievement for the debtors, as it includes a substantial control premium, and it promises to translate into significant recoveries for all the debtor’s principal stakeholders,” read a filing Adelphia filed in support of the motion.
Adelphia’s majority ownership in two joint ventures with Comcast – Century-TCI and Parnassos – will be handled separately. Adelphia is selling its stake in the two units to Comcast and the transactions require a court-approved reorganization plan.
Adelphia remains in bankruptcy protection and last week filed an amended version of its restructuring plan. The company, the country’s fifth-largest cable operator, entered bankruptcy more than four years ago, filing papers on June 25, 2002 showing it had $2.3 billion in debt off its balance sheets.
Adelphia was the country’s fifth-largest cable television company serving more than 5 million customers in 31 states when it was based in tiny Coudersport, Pa. It collapsed into bankruptcy in 2002 after the company disclosed $2.3 billion in off-balance-sheet debt. It later moved to Greenwood Village.
