Adelphia Communications completed the "true-up" mechanism under its first-modified, fifth-amended joint Chapter 11 plan of reorganization, dated Jan. 3, 2007.
On the effective date of the plan, 23,158,360 shares of Time Warner Cable class-A common stock were withheld from the settlement consideration and from distributions to holders of claims against the subsidiary debtors and holders of claims against the parent corporation. The shares were deposited in a true-up holdback account as provided in the plan.
Under the true-up mechanism, the recipient of the settlement consideration and holders of allowed claims against the subsidiary debtors received an initial distribution of shares of Time Warner Cable class-A common stock and had the potential of receiving additional shares from the true-up holdback based on a recalculated deemed value, which is recalculated to be the volume weighted average price per share during market hours of the Time Warner Cable class-A common stock during a 60-day test period as specified in the plan.
To the extent that the shares in the true-up holdback are not distributed to the recipient of the settlement consideration and creditors of the subsidiary debtors, the shares will be distributed to holders of allowed claims against the parent corporation or reserved on account of disputed claims against the parent corporation.
