Lenders Have Own Plan for Adelphia

Adelphia Communications Corp.’s lenders are asking a Bankruptcy Court for permission to file their own plan to reorganize the fifth-largest U.S. cable television operator, arguing that Adelphia’s own plan won’t be approved.

Adelphia has “filed a plan that is so one-sided in favor of structurally subordinated creditors that it apparently would garner the support of no other major constituents,” the banks said in papers filed Thursday in U.S. Bankruptcy Court in New York. The lenders include Citigroup Inc.’s Citibank, Bank of America Corp., Wachovia Corp., Bank of Nova Scotia and Bank of Montreal.

Adelphia filed a plan Wednesday that would grant its unsecured creditors a majority of the company’s new shares once it exits bankruptcy protection. Adelphia’s shareholders committee and founder John Rigas, who is on trial on fraud charges, have also asked for court permission to file their own plans. The shareholders want to sell Adelphia’s assets. Rigas didn’t provide details about his plan.

Under Adelphia’s plan, creditors would be paid from an $8.8-billion loan supplied by J.P. Morgan Chase & Co., Credit Suisse First Boston Corp., Citigroup Inc. and Deutsche Bank. About $750 million of it would be saved for when the company emerges from bankruptcy, which it seeks to do this year. The plan would value Adelphia at $16.1 billion to $17.9 billion.

Greenwood Village, Colo.-based Adelphia has asked the court to bar others from filing competing plans. A hearing on that request is set for March 2.

John Rigas and two sons are accused of stealing from the firm and hiding $2.3 billion in debt, both of which prompted the bankruptcy filing in June 2002. Adelphia listed more than $24 billion in assets and $18 billion in debt at the time.