Adelphia filed for bankruptcy protection in June, as did more than 200 of its subsidiaries, about two weeks after an alleged attempt by Adelphia to sell many of its franchises to third parties, but the negotiations failed.While the bankruptcy is proceeding, Adelphia reportedly obtained $1.5 billion in debtor-in-possession financing to sustain its operations while the bankruptcy is proceeding.In the context of the bankruptcy, Adelphia will be required to assume, assign or reject the current franchise agreement with the City of Santa Paula. The resolution notes that, “during that process, the City Council should play an active and important role so as to ensure that all franchise obligations are satisfied and local cable television obligations are satisfied and local subscribers receive the highest quality, uninterrupted, cable television service.”By forming a coalition, local government will be able to present a united front in the anticipated bankruptcy case, which should allow local governments to assert more influence over the ultimate conditions under which Adelphia - or some other cable provider - will provide services to subscribers.
Council adopts resolution creating united front in Adelphia bankruptcy
October 09, 2002
Santa Paula City Council
The City Council took a proactive step by supporting a resolution to form a local government committee to act as a united front for communities in the bankruptcy of Adelphia Communications, which provides the city’s cable services.
By Peggy KellySanta Paula TimesThe City Council took a proactive step by supporting a resolution to form a local government committee to act as a united front for communities in the bankruptcy of Adelphia Communications, which provides the city’s cable services.The council took the action at the Sept. 3rd meeting.The local government committee, spearheaded by the National Association of Telecommunications & Advisors and joined by the California and Nevada chapters, will be comprised of cities, counties and special districts in their attempt to protect themselves, as well as millions of Adelphia subscribers, from the impacts of the bankruptcy.Santa Paula, which receives over $160,000 annually in cable franchise fees, has been in contract negotiations with Adelphia for about two years.According to the resolution adopted by the council, in recent months Adelphia has undergone well-publicized financial difficulties, including the disclosure of approximately $3.1 billion in previously undisclosed off-balance sheet obligations. There are investigations by the Security & Exchange Commissions as well as two grand juries, allegations of widespread corporate fraud, and substantial defaults on bondholder debts. In addition, there have been allegations of widespread corporate fraud, numerous shareholder lawsuits filed against Adelphia and the arrest of five former executives, including the company founder and close family members.
