(Corrects age in ninth paragraph of Aug. 17 story.)
Adelphia Communications Corp. creditors will receive more than $748 million in cash and shares of Time Warner Cable Inc. (TWC) as partial payment under the company's bankruptcy plan.
Adelphia, once the fifth-largest U.S. cable-television provider, said in a statement it will give creditors $531 million in cash and 6.45 million Time Warner Cable shares. The stock is worth about $217.6 million based on Time Warner Cable's current share price. In Adelphia's reorganization plan that took effect in February, the stock was estimated to be worth $244 million.
Time Warner Inc. and Comcast Corp. purchased Greenwood, Colorado-based Adelphia's operations out of bankruptcy last year.
The planned distribution will give Adelphia's general unsecured creditors and trade creditors $76.74 and 0.93309 of a Time Warner Cable share for each $1,000 they're owed, according to company documents. Adelphia didn't say how much it has distributed to creditors so far. Adelphia spokesman Mark Spiecker didn't return a call for comment.
Holders of Adelphia's 9.875 percent senior debentures and notes are to receive $101.73 and 1.23703 shares of Time Warner Cable for each $1,000 they're owed. The 10.5 percent senior noteholders will get $103.25 and 1.2555 shares, documents on Adelphia's restructuring Web page said.
The company's 7.5 percent senior noteholders will get $101.93 and 1.23951 shares for each $1,000 they are owed.
Shares of Time Warner Cable fell 30 cents to $33.73 at 4 p.m. in New York Stock Exchange composite trading.
The trust collecting money on behalf of Adelphia's creditors periodically distributes funds to cover claims filed in the company's 2002 bankruptcy. The trust announced Aug. 3 that it settled a lawsuit against the cable company's former auditor, Deloitte & Touche LLP, and would receive $167.5 million from the accounting firm.
On Aug. 13, Adelphia founder John Rigas, 82, and his son Timothy, 51, who was finance chief, reported to prison to begin their sentences for looting the company and lying about its finances. They were convicted in 2004. John is serving 15 years. Tim is serving 20 years.
Adelphia began its collapse on March 27, 2002, when it disclosed the Rigases owed $2.3 billion in off-balance-sheet debt on bank loans taken jointly with the company.
To contact the reporter on this story: Christopher Scinta in New York at firstname.lastname@example.org