Court Ruling Keeps Adelphia Bondholders In Bankruptcy Limbo

Jan 25, 2007 (11:01 AM EST)

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The seemingly never-ending saga of Adelphia Communications' effort to emerge from bankruptcy protection won't end this month as previously predicted because a federal judge has blocked the cable television firm's latest effort to resolve the case.

In Manhattan, Judge Shira A. Scheindlin OK'd bondholders' requests to appeal a $15 billion reorganization plan that had been approved by a lower bankruptcy court. The judge said the bondholders demonstrated a "substantial possibility of success on the merits," but she ordered the bondholders to post a $1.3 billion bond to cover other creditors who could suffer in a delay.

The issues surrounding Adelphia have dragged on for years after the cable television firm filed for protection from creditors in 2002. Criminal charges were filed against Adelphia founder John Rigas and his son Timothy Rigas. Both were convicted of fraud and conspiracy but remain free on appeal.

Comcast and Time Warner purchased most of Adelphia's assets for a total of about $17.6 billion. The status of the remaining assets totaling about $15 billion remain to be determined.

Comcast and Time Warner have been working to integrate the Adelphia assets they purchased with varying degrees of success.