Adelphia Toes Line Against Tow

Adelphia Communications Corp. said in a securities filing Friday that it will file an objection in U.S. Bankruptcy Court for the Southern District of New York to claims against the company by former Century Communications Corp. chairman Leonard Tow and his wife, Claire, totaling more than $900 million.

According to the filing, Adelphia said it would seek to reduce or subordinate more than $900 million in claims against the MSO by the Tows and various trusts they control. Simultaneously, the company will file a complaint with the court “seeking to avoid and recover certain unauthorized post-petition transfers and/or fraudulent transfers totaling approximately $21 million, disallow Leonard Tow’s claims pending the return of the avoidable transfers and subordinate Leonard Tow’s claims.”

The initial hearing on the claims objection is scheduled for April 8 before the bankruptcy court.

Tow sold Century to Adelphia in 1999 for $5.2 billion in stock and assumed debt and became one of Adelphia’s largest individual shareholders after that deal. Those holdings became essentially worthless in 2002 when Adelphia became embroiled in an accounting scandal that led to its filing for Chapter 11 bankruptcy protection in June of that year.

Last year, Adelphia agreed to pursue a sale of the company in conjunction with a plan to emerge as a whole entity. Several parties have submitted bids for the assets, including a joint offer from Time Warner Inc. and Comcast Corp. said to be in the $17 billion range.

Adelphia has said that it will make its decision whether to sell the company or emerge from bankruptcy by the end of the first quarter.