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Adelphia allowed to pay $10.2 million to executive

News wire reports

Published August 8, 2006 at midnight

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A bankruptcy judge approved a proposal by Adelphia Communications Corp. to pay as much as $10.2 million to its chief operating officer for his role in the sale of the company’s cable assets to Time Warner Inc. and Comcast Corp.

U.S. Bankruptcy Judge Robert Gerber authorized Adelphia to make the payments to Ronald Cooper at a hearing in New York today. Adelphia delayed a request for permission to pay Chief Executive Officer William Schleyer as much as $15.3 million in a similar bonus while it negotiates the payment with its committee of unsecured creditors.

Adelphia wants to pay the bonuses to the executives in return for their role in helping close the $17.6 billion sale of its assets to Time Warner and Comcast. Adelphia, once the fifth largest U.S. cable television operator, proposes to use the proceeds of the transaction, which closed July 31, to repay creditors under a plan to exit bankruptcy.

"We recognize that Mr. Cooper no longer has a role with this company, and it is appropriate for him to be compensated," said David Friedman, a lawyer representing Adelphia’s committee of unsecured creditors.

Greenwood Village, Colorado-based Adelphia later this month will likely file a request to pay the sale bonus to Schleyer and retention bonuses to several other "key" employees, said company lawyer Myron Trepper.

"These employees have a wealth of institutional knowledge that will benefit this company as it continues" to wind down operations in bankruptcy, Trepper said.

Adelphia filed the 11th-biggest bankruptcy by asset size in U.S. history in June 2002 after an accounting fraud led by founder John Rigas and his son Timothy Rigas. Both were convicted in July 2004 of conspiracy and securities fraud.

Adelphia’s 10.25 percent notes maturing in 2011 rose 2.5 cents to 61 cents on the dollar, according to Trace, the bond- price reporting system of the NASD.

The bankruptcy case is In re Adelphia Communications Corp., 02-41729, U.S. Bankruptcy Court, Southern District of New York (Manhattan).