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Judge Sacks Adelphia Complaint

A bankruptcy court judge Friday shot down The America Channel’s attempt to block Time Warner Inc.’s and Comcast Corp.’s joint purchase of Adelphia Communications Corp., granting Adelphia a temporary restraining order and injunction against the fledgling digital channel’s antitrust suit.

In a brief order issued June 2, U.S. Bankruptcy Court Judge Robert Gerber upheld Adelphia’s motion and enjoined The America Channel from further pursuing its case against Adelphia, from taking any further action to interfere with the court’s jurisdiction over the bankruptcy case and from taking any further action to interfere with the sale of Adelphia assets to Time Warner and Comcast.

An attorney for The America Channel said the network would try to reverse the judge’s decision. “We don’t think there is a valid legal basis for his order, so we are going to challenge it,” said Daniel Shulman, of Minneapolis-based Gray, Plant, Mooty, Mooty & Bennett.

He said TAC didn’t want to pursue its antitrust case in the bankruptcy court because doing so would “force us into the very court where they’re heavily invested in seeing this sale go through. We don’t want to be there.”

TAC could appeal the ruling in federal district court in New York, or it could seek relief from the federal court in Minnesota where the case was filed. Both options are under review, Shulman said. “We are going to do it quickly. We’re not going to wait on this,” he said.

On May 30, The America Channel filed an antitrust suit in U.S. District Court in Minnesota to block the sale, claiming that the Time Warner and Comcast exercise monopoly power in the programming-distribution market that will grow more formidable if the two biggest U.S. cable companies are allowed to purchase Adelphia’s 5 million subscribers and bolster their regional market shares through a series of system swaps.

The America Channel sued in Minnesota because system swaps resulting from the Adelphia deal would leave Comcast as the only incumbent cable operator in the Minneapolis-St. Paul market.

Adelphia filed for the restraining order on June 1.

In the Minnesota suit, The America Channel claimed Comcast and Time Warner engaged in “bid rigging and price fixing” by combining to acquire Adelphia instead of bidding separately, the way Cablevision Systems Corp. did. The joint bid, the suit said, depressed the value of Adelphia.

According to Adelphia’s motion, The America Channel’s motivation for filing the suit was failure to obtain carriage on Time Warner, Adelphia and Comcast cable systems.