NEW YORK — Adelphia Communications chairman and interim CEO Erland Kailbourne has hit the road to reassure employees, subscribers, local government officials and franchise authorities that it’s business as usual at the bankrupt cabler as it restructures under Chapter 11.
Kailbourne, who took Adelphia’s reins from the discredited Rigas family earlier this year, was in Buffalo, N.Y., on Wednesday and is planning to hit all markets where Adelphia has operations; he will make a presentation in Los Angeles early next week. Kailbourne’s promising no layoffs for now at the nation’s fifth largest cable company.
Adelphia’s implosion and accounts of massive and prolonged accounting fraud by the founding Rigas family have rocked the cable industry and broader media biz. Kailbourne and his team are in the midst of a financial revamp that could take five months. Any plan needs approval by creditors and bankruptcy court.
Divestitures of cable systems, including the L.A. properties, are still on the table. Kailbourne has said he’s got eight interested parties, a mix of cable companies and financial buyers. There’s speculation that former Charter Communications topper Jerry Kent may be eyeing some assets.
No deal is likely until Adelphia files its much-delayed 10K, or annual report, for 2001. That could take another 10 to 12 weeks. Potential acquirers need updated financials and are certain to be wary even then given the off-balance sheet financing and self-dealing that’s been uncovered so far.
Sources close to Adelphia say that a Justice Dept. investigation into the Rigases is likely to shift to formal indictments over the next several weeks.
Adelphia founder and former chairman John Rigas and his sons Tim, James and Michael Rigas are under fire.
Some on Wall Street are wondering about the status of Jim Brown, Adelphia’s former head of finance, who was also ejected after decades with the company.
“He’s not part of the family and I wouldn’t be surprised if they were trying to get a lot of information or a plea bargain from him,” speculated one fund manager.