EXHIBIT 99.1
ADELPHIA
For Immediate Release Contacts:
(Media) Paul Jacobson (303) 268-6426
(Investor Relations) Mark Spiecker (303) 268-6545
Adelphia Seeks Court Approval To Facilitate Sale of Assets
To Time Warner Cable and Comcast
If Approved, Sale To Time Warner Cable and Sale of Some Assets To
Comcast Could Proceed Without A Creditor Vote
Adelphia-Comcast Joint Ventures Sale To Close After Confirmation of Bankruptcy
Plan
NEW YORK, May 26, 2006 - Adelphia Communications Corporation (OTC:ADELQ)
intends to seek authority from the United States Bankruptcy Court for the
Southern District of New York to proceed with its asset sale to a subsidiary of
Time Warner Cable and a portion of its asset sale to Comcast Corporation without
first confirming a Chapter 11 Plan of Reorganization. If the motion is granted,
it will increase the likelihood of the transaction being completed in a timely
manner.
Adelphia currently anticipates that a hearing to approve certain amended
bid protections will be held on or about June 8, followed by a hearing to
approve the sale, as well as a Plan of Reorganization related to Adelphia's
joint ventures with Comcast, on or about June 27.
Time Warner Cable and Comcast are working closely with Adelphia to find the
swiftest path to accomplish the sale.
Adelphia's motion was prompted by an ongoing dispute between certain
creditor groups over how to distribute the sale proceeds, which has delayed
resolution of Adelphia's bankruptcy, a prerequisite for closing the asset sale
under the current terms of the deal. Court approval would authorize limited
amendments to the sale
agreements that would allow the asset sale to Time Warner Cable and certain of
the assets to be sold to Comcast to take place without first confirming a Plan
of Reorganization for such assets and without the corresponding creditors' vote.
Adelphia's majority ownership interest in two joint ventures with Comcast
Corporation, Century-TCI and Parnassos, would still be sold to Comcast
concurrently with the consummation of a Plan of Reorganization for those joint
ventures. Other assets being purchased by Comcast would, under the proposal, be
purchased without prior confirmation of a Plan of Reorganization and without the
associated creditors' vote.
The closing of the Comcast and Time Warner Cable acquisitions are
conditioned on one another and are expected to occur simultaneously.
"Despite our best efforts, the creditors' disputes remain unresolved," said
William Schleyer, chairman and CEO of Adelphia. "Removing the requirement for a
confirmed Plan of Reorganization for Adelphia greatly increases the odds of
Adelphia's sale closing in a timely manner. We believe these modifications
accommodate the desires of creditors to lock in maximum value for the estate
while enabling them to continue settlement discussions and litigation without
the pressure of a looming deadline.
"It has the added benefit of providing greater certainty to our employees,
customers and the local communities we serve who are anxious to make the
transition from a much-improved Adelphia to even stronger companies in Comcast
and Time Warner Cable."
If the modified approach is used, after making distributions to creditors
of the joint ventures pursuant to a Plan, Adelphia would be comprised of the
balance of cash (approximately $12.7 billion, less cash payments to joint
venture creditors) and Time Warner Cable stock (approximately 16 percent of the
common stock of Time Warner Cable) used to pay for Adelphia's assets. The
entities other than the joint ventures
would remain in bankruptcy. The remaining creditors could continue their
negotiations and litigation over how to distribute the value of the bankruptcy
estate.
For Adelphia employees, customers and the communities it serves, the
modifications would have no effect on the well-planned transition related to
operations and job transfers. There will be no change in the ultimate ownership
of the former Adelphia systems; at the conclusion of the transactions, the
ownership of such systems will be the same as contemplated under the previous
plan and the separate agreement between Time Warner Cable and Comcast.
The modifications Adelphia expects to request include a requirement that
Adelphia sell a portion of Time Warner Cable shares to be received by Adelphia
in an underwritten public offering and a provision that an amount equal to the
already approved breakup fee automatically would be paid or credited against the
purchase price if the sale fails to close by August 31, 2006, under certain
circumstances.
There is no assurance that an asset sale or Plan of Reorganization can be
consummated on a timely basis, if at all. An asset sale under Section 363 of the
Bankruptcy Code may involve additional transaction-related costs, which may be
substantial.
A copy of the motion filed with the court is available in the investor
relations section of the Adelphia corporate web site www.adelphia.com.
About Adelphia
Adelphia Communications Corporation is the fifth-largest cable television
company in the country. It serves customers in 31 states and offers analog and
digital video services, high-speed Internet access and other advanced services
over Adelphia's broadband networks.
Cautionary Statement Regarding Forward-Looking Statements
This press release includes forward-looking statements. All statements
regarding the Company's and its subsidiaries' and affiliates' expected future
financial position, results of operations, cash flows, sale of the Company,
settlements with the Securities and Exchange Commission (the "SEC") and the
United States Attorneys' Office for the Southern District of New York (the "U.S.
Attorney"), restructuring and
financing plans, expected emergence from bankruptcy, business strategy, budgets,
projected costs, capital expenditures, network upgrades, products and services,
competitive positions, growth opportunities, plans and objectives of management
for future operations, as well as statements that include words such as
"anticipate," "if," "believe," "plan," "estimate," "expect," "intend," "may,"
"could," "should," "will" and other similar expressions are forward-looking
statements. Such forward-looking statements are inherently uncertain, and
readers must recognize that actual results may differ materially from the
Company's expectations. The Company does not undertake a duty to update such
forward-looking statements. Factors that may cause actual results to differ
materially from those in the forward-looking statements include whether the
proposed sale of the Company's assets to Time Warner NY Cable LLC ("Time
Warner") and Comcast Corporation ("Comcast") is approved and consummated,
whether the contemplated modifications to such sale transactions will be
approved and timely consummated, the potential costs and impacts of the sale
transactions contemplated by the proposed modifications, whether the Company's
Modified Fourth Amended Joint Plan of Reorganization, filed with the United
States Bankruptcy Court for the Southern District of New York (the "Bankruptcy
Court") on April 28, 2006, is confirmed and consummated in time to close the
sale of such assets to Time Warner and Comcast in the event the contemplated
modifications to such sale transactions are not approved and timely consummated,
whether the transactions contemplated by the settlements with the SEC and the
U.S. Attorney and any other agreements needed to effect those transactions are
consummated, the Company's pending bankruptcy proceeding, results of litigation
against the Company, results and impacts of the proposed sale of the Company's
assets, the effects of government regulation including the actions of local
cable franchising authorities, the availability of financing, actions of the
Company's competitors, pricing and availability of programming, equipment,
supplies and other inputs, the Company's ability to upgrade its broadband
network, technological developments, changes in general economic conditions, and
those discussed under Items 1A, "Risk Factors" in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2005 and Quarterly Report on
Form 10-Q for the period ended March 31, 2006 and in the Company's supplement to
the Fourth Amended Disclosure Statement, filed with the Bankruptcy Court on
April 28, 2006, which is available in the investor relations section of the
Company's website at www.adelphia.com. Information contained on our Internet
website is not incorporated by reference into this press release. Many of these
factors are outside of the Company's control.