On June 25, 2002, Adelphia Communications filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code.
Then the story gets interesting...
Early in 2004, it appeared that the last chapter of the Rigas Debacle was about to be written. New management was brought in and given a simple task: get the company out of bankruptcy... NOW! The new execs, working to win an eight-figure bonus, announced that Adelphia would exit bankruptcy with $8.8 billion in debt and an assumed value of nearly $18 billion.
Creditors would get some cash and some stock. Common shareholders would, of course, be treated about as well as the Rigas family (without the orange jump suit and leg irons, of course). All that would be left to this Greek Drama is the criminal trial. Not divine retribution, but the average United States Attorney can do a decent impression of a vengeful demigod.
Then the equity holders started doing the math. Over five million subscribers. Two crown jewel systems: Southern California and South Florida. What if, instead of a measly $3,400 per customer, other cable operators and media companies would pay over $4,000 per home for the privilege of offering each the next generation of digital services?
So the equity holders screamed. And the bondholders, preferring long green to long common, wailed and gnashed their teeth. And the CEO, feeling the heat, saw the light: he announced, on April 22, that Adelphia would solicit bids for the company's assets.
The equity holders started seeing visions of sugarplums (well, 10-baggers).
There are just a few small matters: the $16.6 billion in parent and subsidiary debt, the $1.5 billion Debtor-in-Possession financing (that kept Spongebob transmitting to all those TVs), the unaudited books, and the convoluted joint ventures, subsidiaries, and remaining ties to the Rigas family. Oh, and all those pesky class-action securities lawsuits (whose claims exceed the GDP of the average European country).
So, IS THIS PIG WORTH ANYTHING? Talk amongst yourselves.
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What's left? FACTS! NUMBERS! NEWS FROM THE BANKRUPTCY COURT OR CABLE CONFERENCES! even... RUMORS! (but keep those reasonable and mention each just once).
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