A federal judge will hear arguments as to whether three New Hampshire towns discriminated against bankrupt Adelphia Communications Corp. by revoking the cable operator's franchises.
Adelphia claims the three communities — Milford, Litchfield and Hudson — revoked franchises "solely" due to its bankruptcy filing last June. That is about the time the three towns announced their actions.
The cities say they the revocations followed four years of "fruitless negotiations" with the Coudersport, Pa.-based MSO, embroiled in a massive scandal related to a revelation of $3.1 billion in off-balance sheet debt last March.
Milford's franchise expired June 1, 2000, and was not extended beyond that date. The Litchfield and Hudson franchises ended Aug. 1, 2000, and Dec. 31, 2000, respectively.
"During the few months prior to the towns' decision of non-renewal, negotiations were further hindered by the fact that the debtors were not doing things they said they would and negotiations and discussions were becoming increasingly sparse and non-productive," Joel Brighton, an attorney for the cities, wrote in legal filings.
Adelphia challenged the revocations on Oct. 25, 2002, in the U.S. District Court for the District of New Hampshire. That case hasn't reached trial yet. Adelphia also filed a motion before the U.S. Bankruptcy Court for the Southern District of New York, claiming the cities violated the anti-discrimination ban in federal bankruptcy law.
In other words, Adelphia said it was not treated the same as any other cable company that is not in bankruptcy.
It asked the court to direct the cities to renew its franchises — or at least prevent the localities from acting on revocation.
Bankruptcy Court Judge Robert Gerber decided to hold a limited hearing on the issue of discrimination, as defined in the bankruptcy codes. He didn't immediately set a date for the proceeding.
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