Adelphia Bankruptcy Plan Approved

On January 3, the U.S. Bankruptcy Court for the Southern District of New York approved Willkie client Adelphia Communications Corp.’s plan to pay creditors, ending one of the largest bankruptcy cases in U.S. history.  Willkie has represented Adelphia in its bankruptcy proceedings since their inception in 2002.  Adelphia was once the nation’s fifth largest cable television company comprising 230 legal entities.  Last July, Adelphia sold substantially all of its cable operations to Comcast Corp. and Time Warner Inc. for $17.6 billion in cash and shares in Time Warner's cable unit.  Under the approved plan, creditors  will receive $15 billion of that amount in cash and Time Warner Cable shares.  In his 267-page decision, U.S. Bankruptcy Judge Robert Gerber wrote “The plan has secured the assent of over $10 billion in claims, representing approximately 84 percent of the claims in this case.''  Judge Gerber noted that the “great bulk” of objections from a minority of creditors were without merit and were therefore rejected.  The plan is governed by a so-called true-up mechanism, which allows the market to set the value of the Time Warner Cable shares once the plan goes into effect.  At the time Adelphia filed for  bankruptcy protection, it listed assets of $24.4 billion and liabilities of $18.6 billion.  The Adelphia bankruptcy is one of the 12 biggest in U.S. history by assets.  The multidisciplinary Willkie team representing Adelphia was led by partners Myron Trepper and Marc Abrams.