Adelphia update: WSJ SAYS DELISTING MEANS CREDITORS CAN ASK FOR 1.4 BILLION CASH, NOW.

[blitz <blitz () macronet net>]

Don't hold your breath for Adelphia, theyr'e toast...


> Adelphia update: Bankrupcy looms. Insider report follows:
>
> > THIS IS ONE OF THOSE DAYS WHERE THE LATEST NEWS IS A LITTLE OLDER.  BY NOW I'M PRETTY SURE ALL OF YOU SAW THAT THEIR 
> > STOCK CAN'T BE TRADED ANYMORE....THE WALL STREET JOURNAL SAYS - AND THIS IS A FAIRLY NEW ANGLE-- THAT NOW BECAUSE OF 
> > NASDAQ HALT ON TRADING, BONDHOLDERS CAN CALL IN 1.4 BILLION IN DEBT. LIKE THAT SCENE IN "IT'S A WONDERFUL LIFE," 
> > WHERE THEY WALK IN AND SCREAM GIVE ME MY MONEY NOW!!!!!! 
> >
> > TWO DAYFILE ITEMS:
> > 1.) BOARD MEETING SATURDAY, EXPECT FIREWORKS BETWEEN ERKIE AND LEONARD TOW, THE NEW GUY.  stories below confirm he's 
> > not happy. again, that's old news, though. although it now looks like tow wants to be chairman of the company.  and 
> > he tried to get backing from board member Gelber. stage is set for a battle.  NY Times did this overnight.
> >
> > 2.) A STORY BELOW SAYS THAT THEY HAVE TO FILE SOME SORT OF NEW FINANCIAL PLAN BY JUNE 15. ( if they don't file 
> > bankruptcy first) 
> >
> > AND ONE OTHER QUICK NOTE: MY PREDICTION ABOUT A THURSDAY BANKRUPTCY IS KAPUT.... BUT WITH THE WSJ SAYING DEBT CAN BE 
> > CALLED IN, AND WITH SALE TALKS TO CHARTER BREAKING DOWN, IT'S PROBABLY SOON.

Addendum: they BROKE down according to local news reports....(Buffalo, NY, home of the Rigas family)

> > ****************
> > May 30, 2002 18:46 ET 
> > Nasdaq to Delist Adelphia Communications Corp.
> >
> > NEW YORK, May 30 /PRNewswire/ -- The Nasdaq Stock Market, Inc. (Nasdaq)(R) today announced that it will delist the 
> > securities of Adelphia Communications Corporation 
> > <http://alliance.marketwatch.com/custom/alliance/interactivechart.asp?symb=ADLAE>(NASDAQ: ADLAE) based upon its 
> > failure to timely file its periodic reports with the Securities and Exchange Commission as required by Nasdaq rules 
> > and based upon public interest concerns.
> >
> > The delisting will be effective upon the open of business on Monday, June 3, 2002, in order to provide for an orderly 
> > transition of index components in the Nasdaq 100 Index. 
> >
> > Source: The Nasdaq Stock Market, Inc.
> >
> > CONTACT: Scott Peterson of The Nasdaq Stock Market, Inc.,
> > +1-301-978-4873
> >
> > Web site: <http://www.nasdaqnews.com/>http://www.nasdaqnews.com/
> > http://www.nasdaq.com/
> > May 30, 2002 05:39 PM
> >
> > Dow Jones Business News via Dow Jones
> >
> > WASHINGTON -(Dow Jones)- Brand-new Adelphia Communications  Corp. (ADLAE) board member Leonard Tow on Thursday asked 
> > that the company refrain from selling its cable assets and repeated his request that the company add Rudy Graf to the 
> > board.
> >
> > Tow, the company's largest shareholder outside of the family of former Chief Executive John J. Rigas, said he opposes 
> > the company's plan to quickly sell the company's most valuable cable properties.
> >
> > Tow, whose affiliates beneficially own 12.76% of the company's Class A shares, said the company intends to complete 
> > the sale by Friday evening.
> >
> > Adelphia has been reported to be seeking a sale of cable properties to Charter Communications Inc. (CHTR).Adelphia 
> > spokesman Gary Holmes said the company had not yet seen the letter, which was filed with the Securities and Exchange 
> > Commission on Thursday.
> >
> > My guess is that we're not going to be able to comment on the filing, Holmes said.
> >
> > Tow, whose appointment to the company's board was announced Tuesday, made his requests in a letter dated Thursday to 
> > newly appointed Chairman and interim Chief Executive Erland E. Kailborne.
> >
> > (This story was originally published by Dow Jones Newswires)
> >
> > Copyright © 2002 Dow Jones & Company, Inc.
> >
> > May 30, 2002 19:58 ET 
> > Adelphia Responds to Leonard Tow's SEC Filing
> >
> > COUDERSPORT, Pa., May 30 /PRNewswire-FirstCall/ -- Adelphia Communications Corporation 
> > <http://alliance.marketwatch.com/custom/alliance/interactivechart.asp?symb=ADLAE>(NASDAQ: ADLAE) today issued the 
> > following letter to Dr. Leonard Tow:
> >
> >
> >  May 30, 2002
> >  Leonard Tow
> >  160 Lantern Ridge Road
> >  New Canaan, CT 06840
> >
> >
> >  Dear Dr. Tow:
> >
> > I was, as I am sure you realize, surprised to receive your letter of earlier today. We have told you that we would 
> > brief you on the asset sale proposals in detail at the Board meeting Saturday. We have also explained the general 
> > goals and progress to you orally. Your letter is the first suggestion that you felt you needed more detail before 
> > Saturday.
> >
> > Your letter is also the first indication that you object to the company's need to address its liquidity issues 
> > through asset sales -- proposed asset sales that I thought you fully agreed were essential to the company's survival. 
> > We have asked you for any concrete proposal you have as to how to restructure the company's debt. While I did not 
> > intend to press you for any specific plan you might have until Saturday, in light of your objection to the planned 
> > asset sales I would ask you to provide me in as much detail as you are now able, what specific, concrete alternative 
> > or alternatives you propose. You will, I know, understand that general ideas without concrete details as to how they 
> > will be implemented are of little use at this time.
> >
> > Les Gelber has shared with me your proposal that you be elected Chairman of the company. I certainly hope that your 
> > letter is, and your participation as a member of the Board, will be directed towards what will benefit all of the 
> > company's shareholders and not in pursuit of a separate agenda.
> >
> > Incidentally, you earlier asked and were specifically told that no transaction would be completed internally or 
> > otherwise before the Board meeting. I cannot understand what purpose you believe is served by including a knowingly 
> > false statement in a letter -- particularly a letter that I understand you released to the press contemporaneously 
> > with faxing it to me.
> >
> >
> >  Sincerely,
> >  Erland E. Kailbourne
> >
> > May 31, 2002 
> > U.S. BUSINESS NEWS
> >
> > Nasdaq Plans to Delist Adelphia,
> > Triggering Clause in Bond Deal
> >
> > By DEBORAH SOLOMON and ROBERT FRANK 
> > Staff Reporters of THE WALL STREET JOURNAL
> > COMPANIES
> > Dow Jones, <http://online.wsj.com/reuters_popup>Reuters
> > <http://online.wsj.com/mds/companyresearch-quote.cgi?route=BOEH&template=company-research&ambiguous-purchase-template=company-research-symbol-ambiguity&profile-name=Portfolio1&profile-version=3.0&profile-type=Portfolio&profile-format-action=include&profile-read-action=skip-read&profile-write-action=skip-write&p-type=djn&p-sym=ADLAE&p-name=&section=quote&profile-end=Portfolio&p-headline=wsjie&the-symbol=ADLAE>Adelphia
> > Communications Corp. Cl A (ADLAE)
> > PRICE
> > CHANGE
> > U.S. dollars1.16
> > 0.00
> > 4:00 p.m. 
> >
> >
> > <http://online.wsj.com/mds/companyresearch-quote.cgi?route=BOEH&template=company-research&ambiguous-purchase-template=company-research-symbol-ambiguity&profile-name=Portfolio1&profile-version=3.0&profile-type=Portfolio&profile-format-action=include&profile-read-action=skip-read&profile-write-action=skip-write&p-type=djn&p-sym=CHTR&p-name=&section=quote&profile-end=Portfolio&p-headline=wsjie&the-symbol=CHTR>Charter
> > Communications Inc. Cl A (CHTR)
> > PRICE
> > CHANGE
> > U.S. dollars7.16
> > -0.44
> > 4:00 p.m. 
> >
> >
> > * At Market Close
> >
> > The Nasdaq Stock Market said it will delist shares of Adelphia Communications Corp. on Monday, striking a severe blow 
> > that analysts said will likely land the nation's sixth-largest cable company in bankruptcy proceedings.
> >
> > The delisting of Adelphia, which has been trying to stave off such a move for more than a month, triggers a clause 
> > that lets bondholders demand $1.4 billion in cash. Such a demand would cripple cash-strapped Adelphia, which has been 
> > frantically trying to sell assets and raise $1 billion in private equity.
> >
> > Meantime, talks have broken down between Adelphia and Charter Communications Inc., which was negotiating to buy one 
> > million cable subscribers for $3.3 billion to $3.5 billion. People familiar with the matter said Adelphia was asking 
> > for more than Charter was willing to pay.
> > SPECIAL PAGE
> > Go to the <http://online.wsj.com/page/0,,2_0801,00.html>Called to Account page1 for more coverage of issues worrying 
> > investors after Enron's collapse. 
> >
> > CONTINUING COVERAGE
> > • <http://online.wsj.com/article/0,,SB1022701359257270560,00.html?mod=article-outset-box>Adelphia's Auditor, 
> > Deloitte, Draws Regulators' Attention2
> > 05/30/02
> >
> > • <http://online.wsj.com/article/0,,SB1022626305474179480,00.html?mod=article-outset-box>Adelphia Scrambles for 
> > Funding as a Major Cash Crisis Looms3
> > 05/29/02
> >
> > • <http://online.wsj.com/article/0,,SB1022539062110415680,00.html?mod=article-outset-box>In Small-Town Coudersport, 
> > Pa., Adelphia CEO Rigas Is Still Hero4
> > 05/28/02
> >
> > • <http://online.wsj.com/article/0,,SB1022536853751083080,00.html?mod=article-outset-box>Adelphia Paid Founding 
> > Family Millions for Its Private Ventures
> > 05/28/02
> >
> >
> > Nasdaq said in a statement that Adelphia's delisting is "based upon its failure to timely file its periodic reports 
> > with the Securities and Exchange Commission as required by Nasdaq rules and based upon public interest concerns."
> >
> > Adelphia is under criminal and regulatory investigations by the Justice Department and SEC for accounting practices, 
> > including self-dealing between the company and its founding Rigas family. Nasdaq officials had asked Adelphia two 
> > weeks ago for more information about the related-party transactions that are under investigation. Last week, the 
> > company detailed in an SEC filing how it doled out hundreds of millions of dollars to the Rigas family to pay for 
> > everything from stock purchases to Manhattan apartments. The Rigas family also borrowed about $3 billion from 
> > Adelphia, half of which it used to buy stock in the company. The Rigases have since resigned their management posts 
> > and relinquished four of their five seats on the nine-member board.
> >
> > The company has also missed several deadlines for filing financial statements, including one Thursday. In addition to 
> > violating Nasdaq rules, not filing timely financial statements violated agreements with the company's creditor banks 
> > and enables them to force Adelphia into bankruptcy. However, the banks granted Adelphia a waiver Thursday and 
> > extended the deadline for filing until mid-June, according to people familiar with the matter.
> >
> > While it is unclear whether bondholders will force Adelphia to pay out the $1.4 billion, analysts said it is 
> > increasingly likely given the concerns surrounding Adelphia. The Coudersport, Pa., company must make a missed $50 
> > million interest payment by June 15 or risk default. An additional $30 million interest payment is also coming due 
> > next month.
> >
> > Separately, an already-tense battle is escalating between Leonard Tow, a large Adelphia shareholder, and the 
> > company's board. Mr. Tow, who was appointed to the board May 28, asked to be named chairman of Adelphia and told the 
> > board he is concerned that a sale of cable assets could be "devastating" to the company's future.
> >
> > In a letter to Erland Kailbourne, Adelphia's chairman and CEO, Mr. Tow said it is his understanding that discussions 
> > to sell assets are at an advanced stage and that Adelphia is trying to complete a deal by Friday night. He asked that 
> > any sale be delayed until he has time to review the company's financial situation.
> >
> > Mr. Kailbourne fired back his own letter, saying he was "surprised" by Mr. Tow's comments and that Mr. Tow had 
> > suggested privately that asset sales are the right move. Mr. Kailbourne also said Mr. Tow was "specifically told that 
> > no transaction would be completed internally or otherwise before the board meeting" Saturday.
> >
> > Talks continue with private equity firms, including Texas Pacific Group of San Francisco, to invest as much as $1 
> > billion in the company, monies that would be secured by cable assets and repaid with a future sale, according to 
> > people familiar with the talks. Private equity firms are also looking at some of Adelphia's cable assets, including 
> > Providence Equity Partners, a Providence, R.I., firm which specializes in cable, telecommunications and media 
> > investments; Blackstone Group; Apollo Group; and Cypress Group of New York. Talks are fluid, these people say.
> >
> > -- Kara Scannell contributed to this article.
> >
> > Write to Deborah Solomon at <mailto:deborah.solomon () wsj com>deborah.solomon@wsj.com6 and Robert Frank at 
> > <mailto:robert.frank () wsj com>robert.frank@wsj.com7
> > URL for this article:
> > <http://online.wsj.com/article/0,,SB1022791512319529800.djm,00.html>http://online.wsj.com/article/0,,SB1022791512319529800.djm,00.html
> >
> > Hyperlinks in this Article:
> > (1) <http://online.wsj.com/page/0,,2_0801,00.html>http://online.wsj.com/page/0,,2_0801,00.html 
> > (2) http://online.wsj.com/article/0,,SB1022701359257270560,00.html 
> > (3) 
> > <http://online.wsj.com/article/0,,SB1022626305474179480,00.html>http://online.wsj.com/article/0,,SB1022626305474179480,00.html
> >
> > (4) http://online.wsj.com/article/0,,SB1022539062110415680,00.html 
> > (5) 
> > <http://online.wsj.com/article/0,,SB1022536853751083080,00.html>http://online.wsj.com/article/0,,SB1022536853751083080,00.html
> >
> > (6) mailto:deborah.solomon () wsj com 
> > (7) <mailto:robert.frank () wsj com>mailto:robert.frank () wsj com 
> >
> > Updated May 31, 2002
> >
> >
> >
> >
> > Copyright 2002 Dow Jones & Company, Inc. All Rights Reserved
> >
> > Printing, distribution, and use of this material is governed by your Subscription agreement and Copyright laws.
> >
> > For information about subscribing go to http://www.wsj.com
> >
> >
> > BLOOMBERG: 
> > Adelphia Gets Temporary Reprieve on $7 Bln Bank Debt Repayment 
> >
> > Coudersport, Pennsylvania: Adelphia Communications Corp.'s bank lenders refrained from demanding the immediate 
> > repayment of as much as $7 billion of debt for at least a week, averting an almost certain bankruptcy filing by the 
> > sixth- biggest U.S. cable operator, people familiar with the matter said. 
> >
> > Bank of America Corp., Citigroup Inc. and more than 20 other financial institutions are entitled under the terms of 
> > their lending agreement to receive the full amount of their loans after Adelphia failed to produce audited financial 
> > statements for 2001. 
> >
> > ``Taking an extra week to review this very complex situation gives banks a chance to further investigate what has 
> > happened,'' said Jonathan Glaser, head of JMG Capital Partners, which holds Adelphia convertible debt among its $1 
> > billion in assets. 
> >
> > The lenders are giving Adelphia more time to resolve a cash crunch and avoid bankruptcy so the company can try to 
> > sell assets or raise outside capital, the people said. They also want their bankruptcy adviser, Policano & Manzo, to 
> > verify the Coudersport, Pennsylvania-based company's earnings, cash flow and other financial information, the people 
> > said. Adelphia is seeking an asset-sale agreement to help convince bank lenders it will have the cash to meet future 
> > obligations. 
> >
> > MEANWHILE THE AP WIRE IN PENNSYLVANIA DID A LIFE IN COUDERSPORT STORY... I DON'T HAVE ACCESS, BUT THE FIRST PARAGRAPH 
> > IS
> >
> > COUDERSPORT _ Sitting in her downtown diner after serving lunch to several Adelphia employees, Kaye Gerhart looks 
> > more than a little worried. Financial trouble at the struggling cable provider already has cut into her business. If 
> > the worst scenario happened and Adelphia failed, I don't think this diner is strong enough yet to survive. I'm afraid 
> > we'd be out of business.         BC-PA--Adelphia-Anxiety.
> > May 30, 2002 11:11 AM Dow Jones Business News via Dow Jones
> >
> > WASHINGTON -(Dow Jones)- Adelphia Business Solutions Inc. (ABIZQ) has withdrawn its request for final bankruptcy 
> > court approval of a $135 million debtor-in-possession loan from its former parent Adelphia Communications Corp. 
> > (ADLAE) and an entity controlled by that company's chairman and chief executive, according to a court filing 
> > Thursday. In a separate filing Dow Jones Newswires also obtained, Adelphia Business said it will discontinue certain 
> > local and long distance telephone services in Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North 
> > Carolina, South Carolina and Tennessee.
> >
> > The company has sought bankruptcy court approval to sell some of its accounts in these states to BellSouth 
> > Telecommunications Inc. for about $750,000.    (This story was originally published by Dow Jones Newswires)
> >
> > *******************
> >
> > ALSO FROM THE AP-- IN A STORY ABOUT TOW'S PROTEST OF THE SALE:
> >
> > Kevin Kuzio, a bond analyst with KDP Investment Advisors, said banks probably would be reluctant to immediately call 
> > in the loans, but noted Adelphia also soon faces the expiration of a 30-day grace period on $44.7 million worth of 
> > debt payments it acknowledged missing in mid-May.
> >
> > We're getting close to the need for something to happen, Kuzio said. 



By June 15, they need to have a financial plan together, some backing from the banks or private equity to give them the 
liquidity they need to make these debt payments.

> > It's like a plate of worms. There's all this stuff moving around. They have a lot to deal with, Kuzio said.
> >
> > *************NY TIMES*****************
> >
> >
> >
> > May 31, 2002
> >
> >
> >
> >
> >
> >
> >
> >
> > Animosities Flare in the Struggle Over Adelphia
> >
> >
> >
> >
> >
> > By GERALDINE FABRIKANT and ANDREW ROSS SORKIN
> >
> > behind-the-scenes battle that has been raging for several days between Leonard Tow, the largest shareholder of 
> > <http://www.nytimes.com/redirect/marketwatch/redirect.ctx?MW=http://custom.marketwatch.com/custom/nyt-com/html-companyprofile.asp&symb=ADLAE>Adelphia
> > Communications outside the Rigas family, and the company's board culminated in an angry exchange of letters 
> > yesterday between Mr. Tow and Adelphia's interim chief executive.
> >
> > Mr. Tow, who has the support of a group of large institutional shareholders, met with Leslie Gelber, a board member, 
> > on Wednesday and asked to be named chairman. Mr. Tow, who owns about 10 percent of Adelphia's stock, has already 
> > secured two board seats.
> >
> > The board refused that request, and Mr. Tow sent a letter yesterday to Erland E. Kailbourne, Adelphia's interim chief 
> > executive, protesting the company's plan to sell "valuable" cable assets as soon as today, contending that it was 
> > being done in an "atmosphere of desperation." 
> >
> > Adelphia is negotiating to sell cable systems with about 450,000 subscribers in Los Angeles and 550,000 subscribers 
> > in areas including Georgia, South Carolina and North Carolina to the entrepreneur Paul G. Allen, people close to the 
> > talks say.
> >
> > Mr. Kailbourne sent a letter to Mr. Tow saying, "I cannot understand what purpose you believe is served by including 
> > a knowingly false statement in a letter — particularly a letter that I understand you released to the press 
> > contemporaneously with faxing it to me."
> >
> > Mr. Kailbourne also admonished Mr. Tow, telling him that his efforts should be "directed toward what will benefit all 
> > of the company's shareholders and not in pursuit of a separate agenda."
> >
> > The vitriolic exchange came as Nasdaq said it would delist Adelphia's stock because the company has not yet filed its 
> > 2001 financial report with the Securities and Exchange Commission. Adelphia, which has been in turmoil since March 
> > when it disclosed $2.3 billion in loans to the Rigas family that were guaranteed by the company, has said it needs 
> > time to restate several years of its financial reports to reflect the loans. The delisting, to take place on Monday, 
> > could put the company in default of some loan provisions, possibly requiring Adelphia to buy back $1.4 billion in 
> > convertible bonds in cash within 40 days.
> >
> > New disclosures have put the loans to the Rigas family at $3.1 billion and have revealed other questionable dealings 
> > between the company and the family. As a result, all five members of the family have resigned from the board and from 
> > management positions.
> >
> > But with the disclosure of the dealings, the company's accountant, Deloitte & Touche, and the outside directors have 
> > also been criticized by analysts and corporate governance experts for failing either to detect the dealings or to 
> > report them to the company's audit committee. Some investors are calling for new management.
> >
> > "It is critical that the company install an experienced cable executive," said Gordon Crawford, a senior vice 
> > president at Capital Research and Management, which owns nine million Adelphia shares. 
> >
> > But despite the shareholders' dissatisfaction with the current board, the directors have no intention of giving 
> > control of Adelphia to a minority shareholder who is not offering to pay a premium to take the company over, people 
> > briefed on the situation said yesterday.
> >
> > These people said Mr. Tow's corporate history made it particularly unlikely the board would hand over control. Mr. 
> > Tow took over the Citizens Utilities Company without paying a penny, critics say, by having himself elected to the 
> > board and then pushing members off and replacing them with longtime associates. Once in control of the board, which 
> > included his wife — who is still a director — Mr. Tow received millions of dollars more in compensation than that of 
> > other utility executives at the time. And he made deals that shifted costs to Citizens, a cash-rich company in which 
> > he had a negligible stake, and shifted fees to Century Communications, a cash-poor company in which he owned a big 
> > stake. At the time, the California Public Employees Retirement System sent the company's directors a letter comparing 
> > them to "pigs at the trough" for having allowed Mr. Tow such free rein. Citizens Utilities was renamed Citizens 
> > Communications in 2000.
> >
> > People close to Adelphia's board also said that Mr. Tow, in the letter he released yesterday, misrepresented the sale 
> > of cable assets by saying it could be completed by today. They said that the statement was simply inaccurate and that 
> > the deal could not possibly happen that quickly. 
> >
> > It is not entirely clear what Mr. Tow's strategy is for Adelphia, aside from his interest in taking control. In his 
> > letter, he argued for the company to recover its footing before selling assets, although he does not rule out such 
> > sales later on. 
> >
> > As a shareholder, Mr. Tow is in a desperate position. Equity investors are the last to recover any money in a 
> > bankruptcy. And if Adelphia skirts bankruptcy, any sale of a crucial asset weakens the company, and thus its appeal 
> > to equity investors, because it removes valuable assets and cash flow. A fire sale of assets is the least desirable 
> > solution, Mr. Tow apparently believes. 
> >
> > He may think that he is best able to negotiate with the banks to persuade them to resume lending, a move that could 
> > provide time for a more carefully planned sale of some assets, a person close to the talks said. 
> >
> > He may think that in an organized bankruptcy, a planned sale of assets would bring better prices and even leave 
> > something over for equity holders, one bondholder said yesterday. 
> >
> > Whatever his agenda, and that was not entirely clear yesterday, if the company does strike a deal with Mr. Allen to 
> > sell cable assets, it is not clear that Mr. Tow could stop such a sale. Stopping a sale would require a majority vote 
> > on the seven-member board, people briefed on the situation noted, and Mr. Tow has only two seats. 
> >
> > In terms of shareholder votes, the Rigases controlled 60 percent of the votes through supervoting shares. In the wake 
> > of the current debacle, the Rigases have agreed that those shares would be voted by a special committee of outside 
> > directors. 


My notes: The Rigas family is headed to prison, unless they have sufficient resources to buy their way out of this 
debacle, which seems VERY unlikely.